What you need to know:
- Mr Manoah Esipisu, Kenya’s Secretary for Communications and State House Spokesman, denied Nigerian investors had been allocated oil blocks.
- Nigeria is the world’s 13th biggest oil producer, with an estimated output of 2.2 million barrels per day. But the African giant is largely seen as a study in how not to manage oil wealth.
A powerful Nigerian minister has revealed that Kenya allocated 46 oil blocks to investors from her country during a recent state visit to Nairobi by President Goodluck Jonathan.
Nigeria’s Minister for Petroleum Resources Diezani Alison-Madueke told the State-run News Agency of Nigeria after the Kenyan visit that the concession was given in talks preceding an investment forum held in Nairobi on September 6. This was, however, not made public during the three-day visit that started on September 5.
Ms Alison-Madueke further said that the bilateral oil and gas Memorandum of Understanding (MoU), which was among the seven signed during the Nairobi visit, was broadly meant to help Kenya benefit from the West African giant’s decades of experience in oil exploration and production, mostly by sharing information on policies and processes.
“It is well known now that Kenya recently discovered hydro-carbon reserves and they are very keen to move quite aggressively in terms of exploration activities. They felt that, as a sister African country, it only makes sense that we exchange agreement in co-operation to hand over knowledge, capabilities and experience learnt,” the minister, who accompanied President Jonathan to Nairobi alongside 50 top Nigerian investors, told her country’s journalists.
She inferred the oil blocks were a sweetener that gave the West Africans a foothold in Kenya, which is “a burgeoning frontier for investment in the oil and gas sector”.
“We also looked at the areas surrounding Nigeria’s investment possibilities where we think Nigerian businessmen and women could come into the oil and gas sector in Kenya,” she said.
However, Mr Manoah Esipisu, Kenya’s Secretary for Communications and State House Spokesman, denied Nigerian investors had been allocated oil blocks.
“If the Nigerian minister said that, it is not true. Kenya signed an MoU with Nigeria and there was nothing specific attached to it; the MoU contained no oil blocks. That is why President Uhuru Kenyatta said the MoUs should be turned into agreements by early next year. What this basically means is that the specifics have to be agreed on,” Mr Esipisu said when the Sunday Nation contacted him.
He explained that if the Nigerians were interested in oil blocks then they had to follow the correct procedure and put in a request to be considered. Mr Esipisu, however, said Kenya is keen to learn from Nigeria’s decades of experience.
“Nigeria offered technical expertise in oil production, which they have been doing since 1958 and Kenya is willing to take this on board. Then there was an earlier agreement where Nigeria sold to Kenya 30,000 barrels of crude oil at concessionary rates. This has since expired and Kenya would like to renew it,” he said.
Other MoUs signed between the two governments covered visa exemption for holders of diplomatic passports; tourism; twinning of cities and towns; trade and investment; agriculture, livestock and fisheries; and the conclusion of agreements on double taxation and promotion and protection of investments. Only cursory details on the deals were publicly revealed.
The denial comes days after the two countries strengthened bilateral ties following a diplomatic fallout from the deportation in July of alleged Nigerian drug kingpins, including the controversial Anthony Chinedu.
Nigeria is the world’s 13th biggest oil producer, with an estimated output of 2.2 million barrels per day. But the African giant is largely seen as a study in how not to manage oil wealth.
With a history of armed conflict in the restive oil-rich Niger Delta, complaints of skewed revenue allocation, theft, dysfunctional state petroleum infrastructure and corruption, the clichéd “resource curse” has often been applied to the continent’s most populous state and second largest economy after South Africa.
While Nigeria discovered oil in the 1950s, Kenya’s long search for the “black gold” in commercially viable quantities bubbled to the surface last year when the then President Mwai Kibaki announced that Tullow, a British company, had found oil in Turkana.
Before the Nigerian minister’s revelations, news that Africa’s richest man Aliko Dangote planned to open a Sh35 billion cement factory in Kenya stirred the most excitement.
The statement on the oil blocks by a senior Nigerian official raises questions on whether secret deals were struck during the recent visit. It also puts the spotlight on transparency in the management of Kenya’s nascent oil sector.