Tullow, State strike deal to resolve Turkana grievances

Oil exploration firm Tullow will resume work Friday after a two-week suspension following a row between the firm and the local Turkana people.

A memorandum of understanding was signed yesterday where the firm and the Turkana will resolve the security issues and grievances which led to a halt in exploration in oil Blocks 10BB and 13T.

The British company had suspended work in the blocks more than a week ago after the residents demonstrated demanding jobs and tenders.

Addressing the media in Nairobi yesterday, Energy Cabinet Secretary Davis Chirchir said the two parties agreed to find a method to avoid disruptions in future.

The terms of the memorandum are that Tullow would open a field office in a month through which grievances would be managed.

The oil explorer has also committed to continue offering tangible benefits to local people in jobs and local tenders.

Under the memorandum, the Energy ministry has directed Tullow to double the amount it sets aside for the Social Investment Fund from the current $2 million a year through the company’s scholarship.
Incurred significant costs

On its part, Energy ministry and that of Interior have committed to ensure adequate security for Tullow field staff.

Tullow’s Kenya deputy country manager Sid Black said that the company lost money during the week it had shut work in the two exploration blocks.

“We have definitely incurred significant expenses but it would be immature to throw out a figure. We expect to get everything up and running in the next three weeks,” said Mr Black.

The Energy ministry has however maintained that costs incurred by Tullow during this period will not be recovered from “cost oil” as is the industry practice.

Thursday, the Energy ministry called for bids for audit services on oil and gas exploration companies in Kenya to verify charges and credits on petroleum operations.

This is to ensure that the country reaps maximum revenue from petroleum and natural gas should the latest discoveries lead to commercial production.

Turkana leaders have accused Tullow of not respecting local culture and declining to disclose the number of jobs and tenders awarded to the local people.

MEETS MINIMUM THRESHOLD

“Let investors be sensitive to the culture and after understanding the dynamics they will work with that community,” said Mr James Lomenen, Member of Parliament for Turkana South.

Tullow Oil and its partner Africa Oil Corporation estimate Kenya’s oil in the discoveries made so far to be in excess of 360 million barrels, which the companies say meets the minimum threshold for development.