alexa It's eating season in Turkana as Tullow’s billions feed the elite - Daily Nation

Nation Prime

It's eating season in Turkana as Tullow’s billions feed the elite

PAUL WAFULA
By PAUL WAFULA
More by this Author
ALLAN OLINGO
By ALLAN OLINGO
More by this Author
Monday February 24 2020

Tullow Oil and its partners have sunk Sh200 billion into Kenya’s oil project, money that has created overnight millionaires while widening the gap between the rich and the poor in Turkana County.

Some of the billions are also flowing into the pockets of local politicians and opinion leaders as the rest of the population in the expansive county languishes in abject poverty.

Current and former county government officials have also hurriedly created companies and secured deals with Tullow. Former activists and members of the community who used to lead demonstrations have also joined the gravy train.

Tullow says it has spent Sh100 billion in line with its 50 per cent stake in the project. The rest of the partners among them Total and Africa Oil have put in the remaining half of about Sh100 billion. Some of the biggest beneficiaries of these billions are those who were handed the lucrative oil drilling contracts, equipment leasing and security.

TRANSPORT SYSTEM

Other beneficiaries are those in the transport system, who are making a killing off the Early Oil Pilot Scheme, a loss-making venture that Tullow maintains was never meant to generate a profit but to provide it with quality data to help in decision-making as it goes into full-scale production.

The partners also plan to spend another Sh300 billion on Phase One alone, which will bring the total investment to over half a trillion Kenya shillings. Civicon, an engineering company majority owned by TransCentury, stands tall among those making money from Kenya’s oil dream.

TransCentury was founded by former KenGen Managing Director Eddy Njoroge and businessman Jimnah Mbaru and grew like a whirlwind during the Kibaki regime, clinching multi-billion-shilling contracts in infrastructure and were once managing the old metre-gauge railway. But its fortunes have tumbled downhill in the recent past. They later bought a controlling stake in Civicon, which is the main contractor making money by drilling the oil wells.

An unlikely beneficiary of the Tullow billions is a firm linked to a former Blackwater CEO.

The entrance to Ngamia One in Lokichar,
The entrance to Ngamia One in Lokichar, Turkana. JARED NYATAYA | NATION

In 2014, Hong Kong–based Logistics Company Frontier Services Group fully acquired air charter company Phoenix Aviation for Sh2.4billion. Frontier Services Group, which is associated with former Blackwater CEO and former American Navy Seal Erik Prince, now offers chartered passenger and cargo flights from Wilson Airport to Lokichar in an aviation deal with Tullow Kenya.

The firm moves Tullow staff, contractors, light equipment and suppliers on behalf of the British oil giant between its base at Wilson airport in Nairobi and Kapese airstrip in Lokichar. African Camp Solution (ACS) owns the Sh90-million Kapese airstrip, which was set to be upgraded by Tullow at a cost of Sh200 million. ACS is another contractor who has struck it rich in the Tullow oil business, as it also offers accommodation services to the oil firms and its contractors.Truckers are the other big beneficiaries. The deal went to at least three companies — Oilfield Movers Limited, Multiple Hauliers and Prime Fuels.

FOUR YEARS

The trucking deals were worth at least Sh1.5 billion. Oilfield Movers and Multiple Hauliers were to provide the trucks while Prime Fuels was to bring the tankers. The deal was to last three years from the first shipment, but the delays due to insecurity and infrastructure hitches may see this spill into the fourth year.

Once you lease trucks, you pay some standing fees whether they are in operation or not and this can run into hundreds of millions of shillings. Oilfield Movers Limited is owned by Mwendia Jamleck Nyaga, a former CEO of National Oil Corporation of Kenya (NOCK). Mwendia left NOCK, formed this company in 2012 and secured the lucrative Tullow deal.

MARRIAGE RELATIONSHIP

Until recently, one of his replacements at NOCK was Mary Jane Njoroge, who is married to current Tullow Oil Kenya boss Martin Mbogo. The other Oilfield Movers shareholders and directors are James Gikebe Mbote and Fredrick Kang'ara Mbote. It is not clear if the two Mbote’s are related or just share a name, but they also share a postal address, according to the records retrieved from the company registry. The three own 100,000 ordinary shares each. The only registered charge on the company is Sh35.9 million.

Mr James Mbote is the managing director of Oilfield Movers. He is described on the company’s website as a seasoned oil and gas professional and an accomplished business leader with vast experience in the global upstream and midstream oil and gas sectors. He has previously worked with Nabors Drilling International Limited (NDIL) in Kenya, Tanzania, Libya, Oman and Kuwait. He also worked with Woodside Energy PTY in Kenya during the drilling of the famous Pomboo 1 well.

Multiple Hauliers (EA) Limited was in the news last year when an estranged partner claimed that his colleagues pushed him out of the company. Mr Njenga Kariuki Mungai, 85, alleged that he was a co-founder of the company but was forced out after nine years. Multiple Hauliers is today one of the biggest logistics firms in Kenya and has hundreds of trucks in its fleet.

China bids for Turkana oil

Saturday February 22 2020

After watching from the sidelines for years, China is back on a front-row seat in the bid for Kenya’s oil, as the project’s joint partners grapple with uncertainties due to lack of funds.

China has emerged as the favourite potential partner to help Kenya realise its oil dream after the key players, Tullow Oil Plc and Total SA, kicked off the process of selling part of their stakes in oil discoveries in South Lokichar, Turkana County.

The farm-down by the two oil majors will further delay the project, which has seen its timelines shift every year, raising the costs, which will eventually be borne by the taxpayer.

The Nation understands that China National Offshore Oil Corporation (CNOOC) is one of the favourite bidders for the 32.5 per cent stake up for sale, which would make it the majority partner in the project and a key decision maker in unlocking the current limbo.

SELLING SHARES

Read full article

Records at the company registry show that it directors are Tarlochan Singh Chajja Singh, Rajinder Singh Baryan, and Manvir Singh Baryan. Its shareholders are MG Holdings Limited that has 67,000 shares and Amrik Singh Chhaja Singh, who owns 5,000 ordinary shares.

MG Holdings Limited is owned equally by Manvir Singh Baryan, Tarlochan Singh Chajja Singh and Rajinder Singh Baryan, who is also the managing director. The three Indians each own 666,666 shares in the firm.

DUE DILIGENCE

Tullow is aware that some of the money is ending up in the pockets of the elite and the political class. The firm says that, to a large extent, it does due diligence on companies before it awards them tenders but this also depends on the size of the company.

“In terms of opportunities, we are guided by equity and our standards on safety. We have compliance documents that they would fill,” Mr Mbogo told Nation. The firm says a complaints resolution committee chaired by the county commissioner has now been formed to address the growing number of grievances from residents who feel cheated out of the oil billions.

“We also undertake ethical due diligence. I know there are opportunities accessed by relatives of MCAs or an MP. What we do is that we ask them to document it and also recuse themselves in matters that involve Tullow or oil and gas when it comes up for debate,” Mbogo said. He added that it is not fair to bar someone from accessing opportunities just because he or she is related to a politician.

One of the biggest areas the local community feels grossly cheated is the supply of trucks, which ended up in the hands of the wealthy. In order to see more of their own getting deals from Tullow, three locals teamed up and registered Ekosowan Security Express Services (ESES) Limited, which was handed the security deal at the Lokichar oilfields.

PEACE DIRECTOR

One of the directors of the firm is Col (Rtd) Edward Ekidor Lojore, who is Turkana County’s director of peace. Other shareholders are Gerald Liguyani Majany and Mary Adonga Eria, who in 2017 applied and was shortlisted for a chief officer position. Before KK security, Tullow’s security was being handled by Port Africa between 2012 and 2013. However, because of capacity issues, Ekosowan which says it emerged the best of 15 local companies, did not take up every part of the deal.

“It was a competitive process. But we had an edge over the other bidders because of our experience and understanding of security issues in Turkana,” said Captain (Rtd) Jonathan Meirmug in a recent newsletter published by Tullow Oil. Ekosowan officially took over from KK Security in April 2018. But there was a caveat: “The only requirement was that we partner with a company that had national or international experience. As such, we brought back KK Security Group,” says Captain Meirmug.

Given that KK Security Group was an established organisation, it was resolved that they would handle payroll, and provision of guard uniforms and office furniture. This joint venture with KK Security will end after two years.

As for winning the Tullow Oil contract, Captain (Rtd) Meirmug says it was a god-sent opportunity because they were able to increase their staff by over 200. It also provided the company with an additional revenue stream, which was vital for its expansion.

FOOD SUPPLIER

On its part, Akiberan Aberu Suppliers and Contractors Limited, a small-and-medium-sized enterprise, got deals to supply all types of vegetables, cereals and foodstuff since 2012 capitalising on a ready market with South Lokichar basin supplying to Tullow Oil and other subcontracted companies.

Not all contractors got their money or had it all smooth. In May 2017, Tullow repossessed five critical social investment projects it had handed to Shabaa Civil Engineering and Construction Ltd following a court order.

Shabaa said they had agreed with the company on Sh130 million as the cost of the projects but only Sh80million was paid. Shabaa director Cecilia Ng’itit said they entered into a contract with Tullow in 2015 to construct the social investment projects but, upon completion, the explorer resolved to operate on a measurement-of-work formula hence the protest by repossessing.

More related articles

TULLOW OIL

News

Sunday February 23 2020

Tullow offers Turkana villagers broken promises

A high level of illiteracy has led to oppression of indigenous people....

Read more
By NATION TEAM
More by this Author
Martin Mbogo, the managing director of Tullow

News

Saturday February 22 2020

Turkana project is still viable, Tullow Oil insists

MD Martin Mbogo speaks with Paul Wafula and Allan Olingo about the project's future....

Read more
By PAUL WAFULA
More by this Author
By ALLAN OLINGO
More by this Author
Tullow Oil

News

Sunday February 9 2020

Tullow job cuts deepen oil export doubts

Kenya’s path to oil riches has been slippery, with expensive trials likely to gobble up billions....

Read more
By EDWIN OKOTH
More by this Author
×

Subscribe to Nation Prime

Subscribe