Govt plans sovereign fund for oil revenue as blockade continues
The government is considering setting up a sovereign fund to manage the local community revenue share from proceeds of the country’s crude oil.
This as residents from Turkana east and south continue to clamor for an increased stake in proceeds that has seen operations of the Early Oil Pilot Scheme (EOPS) halted.
What started off as a push for improved security in the region has quickly turned to a government shakedown to return to the negotiating table with Turkana residents even before the country earns its first shilling from the ‘black gold’.
In response to the weeklong blockade of crude oil trucks, the Ministry of Petroleum and Mining now says a new strategy is needed to get locals on board.
Speaking to Citizen Digital Petroleum Cabinet Secretary John Munyes said Turkana residents should calm their fears as the legislation will provide for an equitable share of acquired revenue.
“This fund will manage the resource on behalf of the people. The moment the legislation comes into law, we will sit down under a committee to discuss the priority areas by setting a ranking process to establish what is of importance to communities,” Mr Munyes said.
Talk on the ground has been of equitable share of the five percent allocated to the local community ending up in personal bank accounts, which the government says won’t happen.
The government has seen pressure mount even as local leaders and residents stage aggressive demos to push their point home.
Mr Munyes however warned that the government would be forced to push back, if need be, to unlock the potential of the nascent oil industry.
“As the cabinet secretary I cannot allow these stoppages. We appreciate the insecurity issue but we cannot link it to the transportation of a commodity that is going to help out the country,” he said.
British firm Tullow Oil has been forced to cut back its activities in the area over the past week over security concerns.
According to wire service Reuters, Tullow said it had also reduced the number of personnel on ground.
“Tullow confirms that there have been interruptions to the trucking of crude oil in Turkana County. Tullow is working with the respective national government agencies, the county government, local leadership and the communities to ensure that the matter is resolved amicably,” the firm told Reuters.
President Uhuru Kenyatta flagged off the early oil scheme in June with plans to transport 2,000 barrels of crude oil by road per day.
Tullow is expected to make a final investment decision on Kenya’s crude oil in 2019.
No comments yet.