Ruto: Kenya to Begin Turkana Oil Production Before December

Kenya expects to begin extracting crude oil in Turkana before the end of the year as plans for a major refinery in Lamu move forward, President William Ruto has said.

Speaking to journalists at State House in Mombasa on October 1, Ruto said the government expected crude oil to start being transported from Turkana before December. The planned development would advance Kenya’s efforts to expand its oil industry, with the government also working on infrastructure to transport crude to the coast.

Ruto said Kenya had reached an agreement with Nigerian businessman Aliko Dangote on investment in a pipeline linking Turkana’s oil fields to the proposed refinery in Lamu. The pipeline is expected to provide a route for locally produced crude to reach the facility.

However, oil from Turkana will not be sufficient to supply the refinery at its full capacity. The proposed East African Oil Refinery in Lamu is expected to process up to 700,000 barrels of crude oil per day, requiring supplies from other sources.

Ruto said the government was therefore exploring arrangements to obtain crude from several countries, including Sudan. He said the refinery would be able to source oil based on availability and prevailing prices.

He cited Dangote’s refinery in Nigeria as an example of a large facility that obtains crude from different markets instead of relying solely on domestic production.

The Lamu project is planned as a wider petroleum and industrial development rather than only a facility for processing Turkana crude. The refinery is estimated to cost about Sh2 trillion and is expected to be completed by 2030.

The government plans to produce petroleum products for the domestic market and export some products to other countries in the region. Ruto also identified aviation fuel as one of the products that could be supplied to external markets.

An industrial complex is also planned around the refinery, with facilities for petrochemical, chemical and plastics manufacturing expected to form part of the development. Ruto said Kenya’s plans would not prevent Uganda and Tanzania from developing their own refineries.

He said Kenya would have no objection to Uganda building a smaller refinery and could buy fuel from the country if transporting supplies from Uganda was more economical for western Kenya. He also said Kenya could consider acquiring a stake in a proposed refinery in Tanga, Tanzania.

According to Ruto, several refineries could operate within the East African market because no single facility would be expected to meet the region’s entire petroleum demand. The location and cost of supplies would influence where buyers source their products.

The government also expects local refining to reduce some of the costs associated with importing finished petroleum products. These include transportation and insurance costs, as well as exposure to international oil price changes and supply disruptions linked to instability in oil-producing countries.

The refinery is also expected to provide raw materials for other industries. Ruto said products such as fertiliser and bitumen could be manufactured locally, potentially reducing the need for imports. Petrochemical and plastics production around the Lamu complex is also expected to support additional investment and employment.

The scale of the proposed refinery means its operations will depend on more than Turkana’s oil production. Reliable transport infrastructure, access to competitively priced crude and sufficient regional and international markets will be important to its operations. The planned pipeline and arrangements to source crude from other countries are therefore key components of the project. 

Under the government’s plans, Turkana would provide part of the crude supply, Lamu would serve as the main processing location, and petroleum products would be distributed to Kenya and other regional markets. The first major milestone is the expected start of Turkana oil production before December, followed by the planned completion of the Lamu refinery in 2030.