Members of Parliament are racing against a February 24th deadline to review the South Lokichar Basin’s oil development plan, a high-stakes project that could unlock hundreds of millions of barrels of recoverable crude oil.
- •With just 60 days to conduct public hearings across six counties, Parliament faces the unusual prospect of either shaping a transformative upstream project or watching it proceed without formal legislative input.
- •The plan consolidates Blocks T6 and T7 under a joint development framework, raising the cost recovery ceiling to 85% and securing a 20% government stake, measures aimed at attracting investment to fields long considered marginal.
- •Gulf Energy, the project’s operator, will benefit from exemptions on value-added tax, import levies, and withholding duties, while the government retains a stake designed to capture both revenue and risk.
The joint parliamentary committees on energy are examining whether the plan safeguards state interests by balancing investor incentives with fiscal prudence. Public consultations are scheduled in Turkana, West Pokot, Lamu, Mombasa, Trans Nzoia, and Uasin Gishu.
The government has framed the field development plan as legally sound and economically viable, emphasizing that merging the two marginal blocks allows for more efficient infrastructure use, including a shared central processing facility.
Energy Cabinet Secretary Opiyo Wandayi shunned concerns that the cost recovery ceiling was too high, comparing it to countries like Angola, Ghana, and Cameroon. He also noted that there was no specific law limiting the imposition of such a rate.
Recoverable reserves are estimated at more than 400 million barrels, with total capital expenditure projected at over US$6 billion across the life of the project.
