Tullow Oil defends Sh258 million payout to Turkana County as groups dig in

Workers walk past storage tanks at Tullow Oil's Ngamia 8 drilling site in Lokichar, Turkana County, February 8, 2018. [Reuters]

The Sh258 million paid to the Turkana county government was a settlement for accrued levies chargeable under the devolved unit's Finance Act, Tullow Oil Company has said.

In a letter dated July 10, 2024 and seen by The Standard, Tullow said that the sum remitted did not include compensation for compulsory land acquisition, but was meant for rates and taxes.

A lobby group - Turkana County Extractive Consortium (TEC) had written to Tullow, demanding an explanation of whether funds released to the county government were part of the land lease.

“We reiterate and wish to further clarify that the said sums as remitted to the county government are not for compulsory land acquisition as earlier reported in a section of the media as envisaged in the Land Act 2012 and or any other land laws but accrued levies, rates and taxes chargeable thereunder,” read the statement in part.

Tullow further said the land acquisition for the project, which is the mandate of the National Land Commission(NLC), was still underway. 

“The National Lands Commission and the State Department for Lands and Physical Planning will, in due course, provide additional information on the same,” said Tullow Managing Director Madhan Srinivasan.

But the money has raised eyebrows and civil society groups in the oil-rich region want Tullow and the county government to disclose all the land processes and deals.

A letter dated June 20, 2024, and seen by The Standard, reveals that the Turkana county government acknowledged that it had received the funds and deposited them in the county government revenue account.

“We would like to inform you that on June 20, 2024, we received Sh258 million from Tullow for the lease of land. We will appropriate and account for this revenue in the Financial Year 2024/25 budget estimates and subsequent reports,” the letter states in part.

Turkana County Executive Committee Member (CECM) for Finance and Economic Planning Michael Eregae disclosed that the money was received for the annual lease of 20 acres of community land that accommodates oil wells in Turkana South and East sub-counties.

Eregae said the money was received and factored in the budget. He clarified that the law requires the money to be used by the county government.

However, Turkana County Extractive Consortium has protested a move by the county government to include the funds in the main revenue account, saying it was 'unprocedural' to lump the money in the county government budget estimates.

Agency for Turkana Development Initiative Director Geoffrey Lokol claimed that the county government had not followed the due process as per the Community Land Act that requires the community to benefit from the funds.

The Community Land Act 2016, provides that a county government shall hold in trust all unregistered land on behalf of the communities.

The law states that the county government shall hold in trust for a community any monies payable as compensation for the compulsory acquisition of any unregistered community land.

According to the law upon registration of community land, the county government shall promptly release to the community all such monies payable for compulsory acquisition,.

Any such monies shall be deposited in a special interest-earning account by the county government, hence the county government shall not appropriate or include in its budget.

“It was unfair for the county government to divert the money by including it in the budget estimates for FY 2024/25. The law requires that this money be placed in a special account for the community to benefit,” Lokol said.