We should develop laws to govern drilling and exploration of oil

Global oil prices have been on a downward trend for the last few months owing largely to global oversupply of crude oil. Currently, oil is trading at as low as $50 (Sh5,200) a barrel. This is bound to affect development of crude oil infrastructure in the country. Kenya discovered oil a few years back and there are plans to construct a crude oil pipeline from Lokichar in Turkana County to Lamu County. All indications are that low prices in the international market will slow down or even delay exploration and development of crude oil infrastructure in Kenya.

Despite this state of affairs Kenya should seize the opportunity and address underlying issues in the oil sector. The laws that govern drilling and exploration of oil need to be developed while at the same time consulting the local communities to avoid opposition to the project. Local oil companies can also take advantage of the developments to buy assets at low cost. Experts also note that Kenya may face additional pressure if interest rates are raised in the US. This is again expected to further strain Kenya plans on oil infrastructure.

Oil drilling companies are slowing their activities in Kenya due to uncertainty over future oil prices prospects. Indeed most international drilling companies have been declaring losses. Revenues for most oil marketers have also plummeted due to low global oil prices. With these trends it may take a long time before exploiting the black gold than expected. But we remain hopeful that all will be well.