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Government Halts Early Oil Pilot Scheme

Government Halts Early Oil Pilot Scheme

The Kenyan Government has indicated its intention to temporarily halt the Early Oil Pilot Scheme (EOPS). The Scheme, which was initially supposed to begin in June 2017, has failed to take off due to various reasons related to unpreparedness including; infrastructure upgrade delays and security concerns. The EOPS was ostensibly aimed at testing the market and providing early lessons for the development of Kenya’s petroleum sector.

The Kenya Civil Society Platform on Oil and Gas (KCSPOG) in its October 2016 report that argued against the EOPS based on a number of reasons. The Platform’s research indicated that neither Tullow nor the government would generate any significant economic benefits as the scheme would largely be characterised by small export volumes and high transport costs. The use of an Early Oil Pilot Scheme is not necessarily standard practice in the petroleum development. Indeed, Uganda, where Tullow used to have a stake in one of the blocks, abandoned plans for an EOPS. Transporting oil by trucks and rail is certainly more expensive than transporting it via a pipeline.

Read More KCSPOG Press release Government Halts Early Oil Pilot Scheme