Kenya’s journey toward becoming an oil-exporting nation is nearing a major milestone. Energy and Petroleum Cabinet Secretary Opiyo Wandayi announced that the country expects to launch commercial oil production by the end of this year.
During a Senate plenary session on Wednesday, CS Wandayi detailed the planned progression for drilling operations in the South Lokichar Basin of Turkana County. He explained that while the facility currently produces oil, the volumes do not yet meet the threshold required to sustain a commercial refinery. To reach that goal, the government plans a phased increase in output.
“From the beginning we shall be producing about 20,000 barrels per day, which will progress to some 50,000 barrels per day,” he said.
The Cabinet Secretary further clarified that while Turkana’s output is a significant start, it remains far below the threshold required to sustain a domestic refinery.
“Petroleum economics tell us that we need some 300,000 to 500,000 barrels per day to run a refinery viably,” he noted.
Wandayi used this economic reality to defend the proposed investment in a regional East African refinery in Tanga, Tanzania. He argued that this cross-border project offers a more logical commercial path than attempting to revive the defunct facility in Mombasa.
The Changamwe oil refinery in Mombasa stopped processing crude oil in September 2013, crippled by aging infrastructure and a lack of financial viability. Today, the site serves merely as a storage hub for imported products like LPG, premium petrol, and diesel.
“That informs the reason, the justification, and the basis for the plan to establish a refinery in Tanga that will not only serve Kenya but also the other neighboring countries. It’s basically business logic,” he said.
The South Lokichar project, currently managed by Gulf Energy, holds millions of barrels of recoverable oil. The long-term strategy involves transporting this crude via a planned pipeline to the Lamu port, with export targets set between 25,000 and 80,000 barrels per day.
The strategic shift toward local and regional oil production stems from an urgent need to break Kenya’s reliance on costly imports from the Middle East and other global suppliers. By developing its own resources, the region aims to gain greater control over its energy security and pricing.
The centerpiece of this strategy, the proposed refinery in Tanga, carries a massive price tag of approximately USD 20 billion (Ksh 2.58 trillion). Once operational, the facility will serve as a sustainable powerhouse, meeting the rapidly increasing fuel demands of the entire Eastern African market.
Beyond mere supply, the project acts as a vital economic shield. Regional production would cushion East African nations from volatile external shocks, such as the ongoing conflict between the United States and Iran. These geopolitical tensions have historically triggered massive fluctuations in fuel prices, but a localized supply chain promises to stabilize costs for businesses and consumers alike.
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