Dispute could force Tullow Oil to cease operations

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Residents block trucks carrying oil from Turkana citing insecurity.
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The future of Kenya’s Early Oil Pilot Scheme (EOPS) is in limbo after Tullow Oil threatened to shut down its operations in the Lokichar, owing to a stalemate that has crippled production and transportation.

Disputes on politics, security and resource-sharing between the community and the national government disrupted the shipment of crude from Lokichar to the refinery in Mombasa County on the Coast for more than three weeks after local leaders, Tullow Oil and officials from the central government failed to reach a deal to unlock the impasse.

In a statement, Tullow said it is seeking the backing of the government, Turkana leadership and the community which would ensure future operations are not interrupted.

A further shutdown would delay crude oil trucking to the refinery until at least September

“Our estimates show essential supplies needed to run the Kapese Integrated Operation Base will run out in the two weeks, after which we will have no option but to shut down,” said Tullow.

A further shutdown would delay crude oil trucking to the refinery until at least September.

Kenya planned to export its first oil under the EOPS in June 2017, but disputes emerged between the national government, the county government and the community on how the petrodollars would be shared.

In May, an agreement that proposed 75 per cent of the oil proceeds would go to the national government, 20 per cent to the county government and five per cent to the local community was reached, paving the way for trucking of the crude. But as it is, parties are not on the same page.

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