Kenya’s oil industry may see renewed potential following a bold partnership proposal by Rahul Dhir, CEO of Tullow Oil, aimed at securing collaboration with neighboring South Sudan. This development comes as Tullow Oil, which has operated in Kenya for over a decade, seeks ways to revitalize its operations and commercialize Kenya’s oil reserves after years of challenges.
During a recent industry summit in Nairobi, Dhir emphasized that collaboration with South Sudan could be pivotal to unlocking Kenya’s long-awaited oil production. South Sudan, which has well-established oil fields and export infrastructure, could provide Kenya with valuable expertise and access to regional pipelines, expediting the journey from untapped reserves to market-ready oil. Tullow’s proposal revolves around leveraging South Sudan’s knowledge and resources to complement Kenya’s emerging oil industry, a move that could bolster East Africa’s standing in the global oil market.
Kenya’s oil discovery, made in 2012 in the Lokichar Basin, was met with excitement as it represented the country’s first significant hydrocarbon find. However, progress has since been slow, plagued by logistical hurdles, high operational costs, and protracted regulatory approvals. Tullow’s original plans envisioned an ambitious production timeline, with hopes to export oil by constructing a heated pipeline through the northern region of Kenya to the coast. Yet, nearly a decade later, commercial-scale oil extraction remains unrealized.
According to Dhir, South Sudan’s oil sector experience and functional infrastructure can help Kenya overcome these longstanding challenges. Tullow Oil’s vision for a partnership includes a shared pipeline network to enhance regional energy security and to cut costs associated with developing a stand-alone infrastructure in Kenya. “By joining forces with South Sudan, Kenya can potentially bypass the high costs of developing a standalone oil export pipeline and instead benefit from a shared network,” he noted during his address.
Industry analysts view the proposal as strategic. The regional partnership could unlock new avenues for Kenya while strengthening energy ties between the two East African nations. However, Tullow’s proposed partnership would require collaboration from both governments to set terms that align with their national interests, particularly concerning revenue-sharing and environmental safeguards.
Dhir’s proposition also underscores the need for Kenya to evaluate and adopt policies that facilitate large-scale investments in the oil sector. Currently, ongoing negotiations between Tullow Oil and the Kenyan government on a commercial framework are underway, with Tullow hopeful for favorable terms that will accelerate the project.
If Kenya successfully forges this partnership with South Sudan, it could reshape the country’s economic prospects and boost investor confidence in its oil industry. Tullow’s push for collaboration is a testament to the resilience of Kenya’s oil ambitions, which, if realized, could elevate the country as a key player in Africa’s energy landscape.
