The long road to oil riches for Kenya

“On upgrading, KPRL will be able to process inferior waxy crude oil from Sudan, Iran and Saudi Arabia to top notch Murban and Zakuum crude sold by Abu Dhabi National Corporation,” he said.

Energy permanent secretary Patrick Nyoike in July this year said Essar Energy Overseas Limited will carry out feasibility studies to determine the actual cost of upgrading the plant.

He said the study is to be done by the Indian company in the first six months of 2010.

“Essar has acquired 50 per cent of shares of the refinery and wants the entire plant’s crude oil refining capacity of 4 million metric tonnes per annum utilised on completion of upgrading,” said the PS.

The Government of Kenya owns 50 per cent of KPRL while Essar acquired 17.1 per cent shares of Shell Petroleum Company Ltd, 17.1 per cent of BP Africa Ltd and 15.8 per cent of Chevron Global Energy Inc that the three multinationals put up for sale in 2007 through Wood Mackenzie of London.

Purchase deal

Essar’s Group chief executive Prashant Ruia said the purchase agreement signed in July is part of a two-pronged strategy aimed at enhancing the firm’s global footprint and realising its dream of a refining capacity of one million barrels per day.

“We will be able to substantially add value to other global markets as well with our products. We are extremely obliged and thankful to the Government of Kenya for their support and look forward to working with them to make KPRL a global market leader,” he said.

KPRL has two refinery complexes with distillation, hydro-treating, catalytic reforming and bitumen production units.

Crude oil from the Middle East is transported by sea to Kipevu oil Jetty in Kilindini harbour and carried by pipeline to the refinery at Changamwe.