Canada’s Africa Oil Corp Abandons Plans for Crude Extraction in Kenya’s Northwest Turkana, Citing High Marketing Costs and Pipeline Delays

Africa Oil Corp, a Canadian company that has been exploring oil in Kenya’s northwest Turkana region, has announced that it will no longer seek a partner to invest in crude extraction in the area. The company cited the significant costs involved in marketing the oil through the port of Lamu as the reason for its decision.

Africa Oil Corp has been exploring the Lokichar basin in northwest Turkana since 2012, and the area is believed to hold significant oil reserves. However, the company has faced several challenges in developing the oil field, including security concerns and disputes with local communities over land rights and compensation.

In 2018, the Kenyan government announced plans to build a $1.5 billion pipeline to transport crude oil from the Lokichar basin to the port of Lamu on the Indian Ocean coast. The project, known as the Kenya Crude Oil Pipeline, is being developed by the Kenyan government in partnership with the governments of Uganda and Tanzania.

However, the project has faced several setbacks, including delays in securing financing and concerns over environmental impact. The pipeline is also facing competition from other proposed pipelines in the region, including a pipeline being developed by TotalEnergies to transport crude oil from Uganda to Tanzania.

Given these challenges, Africa Oil Corp has decided not to seek a partner to invest in crude extraction in northwest Turkana. The company’s decision is a blow to Kenya’s efforts to develop its oil industry, which has been viewed as a potential source of economic growth and development.

However, it is important to note that the oil industry can bring significant environmental and social challenges, and any development of oil reserves must be undertaken in a way that is sustainable and respects the rights and interests of local communities.

In light of Africa Oil Corp’s decision, the Kenyan government may need to reassess its plans for the development of the oil industry, including its strategy for marketing crude oil and transporting it to international markets. Ultimately, any development of the oil industry must be undertaken in a way that benefits all Kenyans and respects the country’s natural resources.