Chinese firm signs purchase deal for Kenya’s first crude oil

Early this year, Tullow Oil started the search for buyers of Kenya’s small-scale crude petroleum exports ahead of the first shipment.

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[Image Courtesy: Twitter - @PMugoMugo]

Chinese firm ChemChina UK Limited has landed a purchase deal for Kenya’s first crude oil export. In a joint statement, the Government of Kenya (GoK), together with oil explorer Tullow and partners said the trading company emerged top bidder for the purchase after beating seven other bidders.

ChemChina UK Ltd has been selected as the buyer for Kenya’s first crude oil exports following a competitive tender process,” said Petroleum Principal Secretary Andrew Kamau

The undisclosed buyers who had expressed interest in buying Kenya’s oil were from Europe, China and India.

Early this year, Tullow Oil started the search for buyers of Kenya’s small-scale crude petroleum exports ahead of the first shipment, and on 26th July 2019, invitation to bid was issued to prospective buyers.

Last month, Kenya announced the sale of 200,000 barrels at a cost of US$ 12 million based on the international crude oil prices of about US$63 per barrel.

The initial purchases by ChemChina UK ltd are expected to be small-scale, with full commercial shipments due to begin once the pipeline is constructed.

RELATED: Kenya gearing up to export US$ 12 million crude oil stocks

Kenya Pipeline Company (KPC) has installed crude oil heater at its Mombasa onshore storage tanks in preparation for early export of crude oil.

In July 2018, President Uhuru Kenyatta flagged off the first consignment of crude oil from the Lokichar oil fields in Turkana County for storage, a move that saw Tullow transport the oil by road to Mombasa, a process that was marred by challenges owing to logistical issues and late issuance of regulatory approvals for the production and trucking of the commodity.

200,000 barrels of crude oil have so far been safely delivered for storage at the Kenya Petroleum Refineries in Changamwe Mombasa County as KPC installs crude oil heater ahead of the export.

“KPC is fast-tracking the upgrade of the Kenya Petroleum Refineries Ltd (KPRL) facilities ahead of Kenya’s maiden crude export from Lokichar oilfields in Turkana set for this month,” said Hudson Andambi, KPC Acting managing director.

ChemChina UK Ltd is expected to begin shipping out the crude out of Mombasa in the coming week.