We might not have to sell Turkana Oil

[RV Pundit]

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With 30% growth rate - we must be doing 100,000 barrels per day already
http://www.nation.co.ke/business/Tank-in-oil-prices-fuels-petrol-demand-to-record-high/996-3389688-oqwuqr/index.html

[Kadudu]

We have to export the oil because Kenya does not have an oil refinery. At 100,000 barrels per day, it is not worth it building a refinery. The only worthy solution is to have a joint refinery with Uganda. Anything else will not make economic sense.

With 30% growth rate - we must be doing 100,000 barrels per day already
http://www.nation.co.ke/business/Tank-in-oil-prices-fuels-petrol-demand-to-record-high/996-3389688-oqwuqr/index.html

[Empedocles]

We have to export the oil because Kenya does not have an oil refinery. At 100,000 barrels per day, it is not worth it building a refinery. The only worthy solution is to have a joint refinery with Uganda. Anything else will not make economic sense.

Excuse me but 

Since when has economic sense ever been a criteria for our successive governments?

[RV Pundit]

Yeah it would make sense if we focused on East Africa solution to this. Oil refinery in UG for homa and maybe Eldoret from Turkana Oil. Gas pipeline from TZ. But we would still to export Oil if we were to get enough quantities?

And I am not sure why oil refinery for 100,000 barrels per day won't make sense when we had Kilindini refinery working all those years when our demand was less than 10,000 barrels per day?

In the next 10 yrs I see Kenya oil demand moving from 100K bpd to 500k bpd (compounded annual growth rate of 17.46%) or even 1M bpd (@25% annualized growth rate)....by then in 2026 or 2030...our economy will probably be bigger than RSA now.

We have to export the oil because Kenya does not have an oil refinery. At 100,000 barrels per day, it is not worth it building a refinery. The only worthy solution is to have a joint refinery with Uganda. Anything else will not make economic sense.

[RVtitem]

Yeah it would make sense if we focused on East Africa solution to this. Oil refinery in UG for homa and maybe Eldoret from Turkana Oil. Gas pipeline from TZ. But we would still to export Oil if we were to get enough quantities?

And I am not sure why oil refinery for 100,000 barrels per day won't make sense when we had Kilindini refinery working all those years when our demand was less than 10,000 barrels per day?

In the next 10 yrs I see Kenya oil demand moving from 100K bpd to 500k bpd (compounded annual growth rate of 17.46%) or even 1M bpd (@25% annualized growth rate)....by then in 2026 or 2030...our economy will probably be bigger than RSA now.

We have to export the oil because Kenya does not have an oil refinery. At 100,000 barrels per day, it is not worth it building a refinery. The only worthy solution is to have a joint refinery with Uganda. Anything else will not make economic sense.

I think our oil alone could be worth maybe 1 trillion.

Cost of refinery, pipeline plus other expenses might be 800b.

Then we get a profit of 200b.

Current oil prices do not help either.

The only way is to team with juba/somalia....to gain economies of scale.

[Kadudu]

Sorry, I apologize.

Excuse me but 

Since when has economic sense ever been a criteria for our successive governments?

[Kadudu]

The world has changed and things are not done the same way they were done 40 years ago when the oil refinery was built.
Transport costs have dropped drastically and global logistic is much easier than those days. Surely if the refinery had made ecomical sense, Kenya would have built a new one years ago. Look at uganda with its proved 9 billion oil reserves still has a problem getting an investor to build a small refinery.

Do not also forget that the dependence on oil will reduce in the next decades. I do not see how our economy will overtake that of RSA by 2030 going by the way industries are relocating from Kenya to other countries. There you are too optimistic.

Yeah it would make sense if we focused on East Africa solution to this. Oil refinery in UG for homa and maybe Eldoret from Turkana Oil. Gas pipeline from TZ. But we would still to export Oil if we were to get enough quantities?

And I am not sure why oil refinery for 100,000 barrels per day won't make sense when we had Kilindini refinery working all those years when our demand was less than 10,000 barrels per day?

In the next 10 yrs I see Kenya oil demand moving from 100K bpd to 500k bpd (compounded annual growth rate of 17.46%) or even 1M bpd (@25% annualized growth rate)....by then in 2026 or 2030...our economy will probably be bigger than RSA now.

[RV Pundit]

Interesting. But logistics in Africa is still a problem. Most Africa countries are landlocked deep in the interior. If you mean it will be cheaper to move oil from homa or turkana to mombasa or tanga..then all the way to Singapore..and back..and pump it....and it will be cheaper...that is hard to convince me. And we are talking waxy oil that need to be reheated all the way.

I think some of these things...the country has to shoulder the expense and just do it.

I didn't say we will overtake RSA...but I said we will be where they are now...in 15yrs..economically...and oil consumption wise...in 10yrs if we were to grow our oil appetite at 20% per annum.

We won't be overtake them yet but will not be far from them...their growth has been really anemic.

The world has changed and things are not done the same way they were done 40 years ago when the oil refinery was built.
Transport costs have dropped drastically and global logistic is much easier than those days. Surely if the refinery had made ecomical sense, Kenya would have built a new one years ago. Look at uganda with its proved 9 billion oil reserves still has a problem getting an investor to build a small refinery.

Do not also forget that the dependence on oil will reduce in the next decades. I do not see how our economy will overtake that of RSA by 2030 going by the way industries are relocating from Kenya to other countries. There you are too optimistic.

[MOON Ki]

Interesting back-and-forth on the 100,000 barrels per day.    I wouldn't worry about such figures right now, if Uhuru is to be believed.    Here is what his website put out in August this year:

Following President Uhuru's directive to expedite exportation of Kenya's first oil, Tullow Oil Company has announced that it will start oil exportation in June 2017.
...
initially 2,000 barrels per day will be produced ...

http://www.president.go.ke/2016/08/24/kenya-will-be-an-oil-exporting-country-in-june-2017/

There have been a few responses to that:

http://www.nation.co.ke/lifestyle/smartcompany/Kenya-Slippery-path-to-oil-exports/1226-3371022-13x9ldt/

http://www.nation.co.ke/lifestyle/smartcompany/Kenya-Slippery-path-to-oil-exports/1226-3371022-13x9ldt/

Etc.

Empedocles writes:

Since when has economic sense ever been a criteria for our successive governments?

July 2017:   Elections.   Think of how we gave you laptops for all toddlers, SGR, and have now made us an oil exporter.  Come for the nyama, leave the other guys to meza mate.   

[veritas]

A refinery costs a lot. Not worth it unless there are hybrid designs out there that can also convert soil into energy or something like that. Logistic is def cheaper, these days to places like Singapore and China it's free. Obviously not for consumers since tariffs etc but for exporting oil via an existing refinery since those routes exist anyway means no added cost for Kenya.