Kenya – An African oil upstart in transition
In 2012, Kenya became the latest East African country to enter the oil and gas scene. The discovery of oil resources in the Turkana County provided an extra boost to Kenya’s already growing and diverse economy. But significant political, social, and security challenges remain. This paper analyses the opportunities and risks facing Kenya’s oil industry and its role as a regional oil transport hub.
Based on current discoveries, Kenya may very well become only a small African oil producer. Kenya’s role as a regional hub for East African crude oil and petroleum products may be more significant. But as Kenya’s oil industry moves from exploration to development and potential production, risk incentives among the involved oil companies will decline profoundly in what remains a shifting political and security landscape. Despite lofty regional infrastructure plans, a piecemeal approach – beginning with a basic export pipeline from Uganda and port terminal on Kenya’s coast – may need to be adopted.