Kenya: Tullow Oil Pays Kenya Sh64.6 Million Licence Fees

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London-based Tullow Oil Plc paid the Kenyan government Sh64.6 million in licence fees and infrastructure improvement payments last year in relation its oil production and exploration activities in the country.

The multinational made the disclosure in its report on payments to various governments as part of global efforts to increase transparency in the natural resource extraction industry.

The sum rose marginally from Sh61.4 million in 2016 when Tullow paid the Kenyan government licence fees of Sh61.4 million.

The company did not pay income taxes or royalties in the two years but these revenue items are expected to rise significantly once commercial production starts.

Kenya last month launched its early oil pilot scheme where crude oil is transported by road from Turkana to Mombasa for small-scale exports.

“Initially, the trucks will transport approximately 600 barrels of oil per day (bpd) and this is expected to steadily increase to 2,000 bpd once the early oil production system is fully operational and production testing commences from the Amosing production facility,” Tullow said in a trading update.

The company says its Ngamia-3 well successfully started production last month, adding that its performance will inform further exploration and production activities in South Lokichar basin.

The move to full commercial operations is expected to give a significant revenue boost to State coffers, especially if the resurgent international oil prices remain at current levels or rise further.

The government has said Kenya’s oil production is profitable from $34 per barrel, indicating a potential windfall from the current international crude oil price of $74 a barrel.

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