Kenya-Ethiopia New Oil Pipeline Deal

By Juma / Published June 24, 2016 | 6:43 am

Kenya and Ethiopia have signed a deal to have a joint crude oil pipeline after Uganda chose to build hers to Tanzania.

The deal to build a pipeline to run from Lamu to Addis Ababa materialized after President Uhuru Kenyatta and the Ethiopian Prime Minister Haile Mariam Desalegn met in Nairobi.

In the initial stages, Kenya had hoped to secure a pipeline deal with Uganda and even President Yoweri Museveni came to Kenya for the same but Uganda chose Tanzania through Tanga instead. Another shock came in when Rwanda moved out of the Standard Gauge Railway and also chose to build hers through Tanzania citing high costs in Kenya.

Kenya started exploiting her own oil in Turkana County and the country is set to start the construction of a pipeline from Lokichar oil fields in Turkana at a cost of 210 billion shillings. The pipeline is supposed to connect to Lamu before heading to Addis Ababa Ethiopia. The pipeline from Lokichar to Lamu is set to be completed by the year 2021.

The economic relationship between Kenya and Ethiopia according to economic analysts is a healthy one given the fact that Ethiopia is more economic viable than Kenya in terms of growth. Currently, Ethiopia is among the fastest growing economies in the region having posted double digits in terms of economic growth. Kenya’s economy too has been scaling at an average of 5% for some years now with hopes of improving much more being high.

Kenya’s oil is yet to hit the markets but economic analysts project it to be economically viable by 2018. They, however, say that the fruits of the oil will not come to the country that first because the exploring companies have to recover their costs, make profits first before Kenya can start benefiting from the product directly.

About Juma

Juma is an enthusiastic journalist who believes that journalism has power to change the world either negatively or positively depending on how one uses it.(020) 528 0222 or Email: info@sokodirectory.com

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