Kenya: Oil From Sudan Next Month
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The Nation (Nairobi)
27 August 2008
Posted to the web 28 August 2008
Mugambi Kaburu
Nairobi
Kenya could start importing low-priced crude oil from Sudan as early as next month.
Further to a memorandum of understanding signed by the two countries in Khartoum last week, top National Oil Corporation of Kenya and directors are in Sudan to sign the actual agreement.
Speaking in Nairobi on Wednesday, Sudan's Ambassador to Kenya Majok Guadong told the Nation that the agreement would be signed by Saturday and said that technical teams from both sides would work out the preferential price for Kenya.
"But of course preferential price means that Kenya will buy oil from Sudan at a lower price than the international price," Mr Guadong said.
"After the signing of the actual agreement we expect the first consignment to be here within a month."
According to the agreement Kenya is expected to import at least 500,000 barrels a month, the envoy said.
Essentially the agreement would be between the government-owned National Oil Corporation and the Sudanese Petroleum Corporation, which is wholly owned by the Government of Sudan and is responsible for developing the oil resources of the country and managing its petroleum business.
The Kenyan government has often criticised major oil marketers accusing them of colluding to fix prices, although the claim has never been proven.
Although he had not seen the final document, Mr Guadong said the agreement would be similar to one his country entered into with Ethiopia in 2003.
Ethiopia imports oil from Sudan, which saves the country up to $7 million (Sh480.9 million) annually, according to Ethiopian Petroleum Enterprise.
Although Sudan is not an Organisation of the Petroleum Exporting Countries (OPEC) member, it received observer status in August 2001, a sign that it was recognised as a significant oil producer.
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Its proven oil reserves are currently estimated at 563 million barrels.
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