A petroleum multinational owned by the Chinese has secured the deal to buy Kenya’s very first crude oil export of 200,000 barrels which is scheduled for shipment from Mombasa, next month.
According to Business Daily Africa, this deal will give the World Power, an upper hand with regards to negotiations when the country moves to the commercial production of the commodity.
On Thursday the 15th Of August 2019, the Petroleum Principal Secretary Andrew Kamau revealed that ChemChina (UK) Limited had won the bid to lift the Turkana oil, in what would begin Kenya’s entry into the league of oil exporting countries.
The Chinese firm, which is the oil trading side of ChemChina Petrochemical, conducts its business via storage and procurement for ChemChina’s refinery companies and crude oil trading.
The firm also has a presence in West Africa, according to its online profile.
Kenyan government and Tullow Oil Plc together with its Joint Venture Partners in Kenya (Total and Africa Oil Corp) are pleased to announce that ChemChina UK Ltd has been selected as the buyer for Kenya’s first crude oil export.
In response to enquiries regarding where the crude from Mombasa would be shipped, Mr. Andrew Kamau made it known that, “The firm was selected on the basis of its offered price and according to standard international terms.”
The announcement, comes just two weeks after President Uhuru Kenyatta announced the 1.2 billion Kenyan Shillings ($12 million) sale of crude oil moved from Lokichar to Mombasa over the past one year.
At the current brent crude price in world markets, the sale value represents at least $61.99 per barrel.
President Uhuru Kenyatta’s announcement however, neither disclosed the buyer nor the destination of the crude, a detail kept under wraps by both the government and Tullow Oil.
The British multinational however, has made it known that it would not reveal the buyer of the crude, as a result of a non-disclosure agreement.
The Country Manager for Tullow Oil Martin Mbogo, wrote before the Petroleum Principal Secretary disclosed the name of the buyer, that, “The process was competitive; a group of target buyers was invited to bid for the crude with the winning bidder selected based on the price offered.
The Joint Venture Partners in collaboration with the GOK were involved throughout the process”
China’s entry into Kenya’s crude oil business, signals a new milestone for Chinese interests in the country.
Observers believe that there is a possibility that the general public will view China’s involvement in Kenya’s Crude Oil, as a debt swap.
Currently, China remains Kenya’s top bilateral lender with the overall debt owed standing at 620 billion Kenyan Shillings, according to the latest official data sighted by Business Daily Africa, as its source.
While the crude oil export could, however, work to bridge the 360 billion Kenyan Shillings trade imbalance between the two countries, as trade relations expand into oil, China still remains Kenya’s biggest source of imports, with 370.8 billion Kenyan Shillings worth of goods imported from the World Power last year.
