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February 26, 2020 - 10:41
Cyprian Is Nyakundi
Front Business

Tullow Oil counts on research to avert conflicts in Turkana

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British oil explorer Tullow Oil has enlisted services of research experts SCL Group to steer it into smoother waters in Kenya’s operations ahead of planned commercial production in 2024.

The data analysis firm, according to a proposal seen by the Star is expected to conduct a series of studies looking into Tullow’s past and ongoing activities in Turkana with the aim of designing an elaborate operation plan to inform decisions on commercial operations.

The oil firm has experienced several operational hitches since it discovered oil in Turkana in 2012, mostly hostility from the local community over revenue sharing modalities and local content.

In August last year, Petroleum principal secretary Andrew Kamau told journalists that the project had incurred Sh50 million in delay costs.

This was after the firm was forced to halt operations for more than a month following a standoff between the government and the Turkana community over revenue allocation structure and local content.

They had demanded a total revenue allocation of 30 per cent: 20 per cent to counties and 10 per cent to community and the remaining to the national government.

However, a sharing formula of 70: 25: 5 ratio for the national government, county and community was struck.

”Tullow needs to understand how best to engage positively with its host communities and keep the Kenyan government on the side whilst avoiding entanglement in domestic politics, all of which must be achieved to ensure the long-term attractiveness of the projects it is developing,” SCL said.

Once the analysis has been completed, SCL will create a written report and a power-point presentation detailing a summary of the results of the field research, as well as a full evaluation of Tullow Oil’s, government and other stakeholders’ existing programmes and strategic focus, pointing out areas of success and failures.

It will also give reasons why and how implementation can be improved in a local content action plan with an associated communications campaign.

The research will also look into the firm’s relationships with various state agencies in Kenya and factors that may hurt the firm’s margins before making an investment decision.

In June, the British multinational pushed its target for making the critical Final Investment Decision to 2020 after it emerged that, among other issues, the Nema had delayed its issuance of licenses for the planned Sh10 billion oil pipeline from Turkana to Lamu.

The study which is expected to take more than 100 days will compliment another   ongoing on by Lundin, an indication that Tullow Oil is not taking any chance in its quest to have a share of Kenya’s Sh500 billion oil project.

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