Lobby raises alarm over Tullow Oil's Sh258m land lease pay

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

Tullow Oil has released Sh258 million as part of the compensation for accruing community land leases in the South Lokichar Basin in Turkana County.

The money has, however, raised eyebrows after civil society groups in the oil-rich region claimed that some cumulative oil proceeds meant for land lease and compensation amounting to millions had not been accounted for.

A letter dated June 20, 2024, and seen by The Standard, reveals that the Turkana County government had received the compensation money and deposited it in the County government revenue account.

“We would like to inform you that on June 20, 2024, we received Sh.258 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 said 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.

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

TEC chairman Thomas Eramram has raised the alarm that there was a plot by a section of the County officials and the politicians to allegedly divert the funds meant for the community.

He said some local Members of the County Assembly (MCAs) had started to celebrate the disbursement of the funds in some funerals raising some speculations among residents that they were out to interfere with the distribution of the money.

“This money belongs to the community; it was wrong to put the money in the appropriation budget. We advise them to create a special account for the funds for the purposes of transparency and accountability,” Eramram said.

Local civil society groups have threatened to sue the county government for diverting the oil revenue funds meant to directly benefit the community.

Geoffrey Lokol who is the director of the Agency for Turkana Development Initiative (ATUDI) 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 for which it is held.

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.

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

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 FY2024/25. The law requires that this money must be placed in a separate account for the community to benefit,” Lokol said.

In a letter dated May 29, 2024, TEC wrote to the County government and Tullow Oil to disclose the accruing amount of money paid as land leases and compensations from the exploration stage to the development stage that took place more than ten years ago.

“We would like to categorically deny allegations about disclosure of money allegedly received by the Turkana County government from the lease of 20 acres of community land leased by Tullow Oil company in Turkana,” Dr Eregae said.

“We have always published reports disclosed all manner of revenue received from various revenue streams from public expenditure,” he added

Turkana Extractive Consortium, through its chairman, said it seemed Tullow Oil had not been paying money for leasing community land looking at the cumulative amount of money it paid on June 20, 2024, to the County government.

“We brought to your attention, in our letter that Tullow Oil has been paying Sh20 million annually for leasing community land. We are doubtful that Sh258 million paid by Tullow last month was money for leasing community land in Turkana south and East Sub Counties,” Eramram said.

However, the Civil society groups comprising of TEC, Turkana Community Justice Resource Centre, Esanyanait Assembly and Ekalale Assembly petitioned the County government and Tullow Oil to shed light within 21 days on whether the money received from Tullow Oil was for land lease or for land compensations.