Kenya sees Tullow's local drilling dispute resolved 'very soon'

George Obulutsa
(Blank Headline Received)
An aerial view of an oil exploration site in Bulisa district, approximately 244 km (152 miles) northwest of Kampala in this undated handout photo from Tullow Oil Uganda, received by Reuters July 4, 2012. REUTERS/Tullow Oil Uganda/Handout

By George Obulutsa

NAIROBI (Reuters) - The Kenyan government expects a dispute between Tullow Oil and residents in the northwest of the country which led to the suspension of drilling last week will be "resolved very soon", a senior official said on Tuesday.

Backed by local politicians, demonstrators from the poor, northern Turkana community marched on Tullow sites demanding more jobs and other benefits, prompting one of Sub-Saharan Africa's most experienced oil explorers to suspend work.

Tullow and its partner Africa Oil, temporarily stopped drilling operations on Block 10BB and Block 13T last week due to security concerns about the protests.

"We want to reiterate we take our investors seriously, and this matter will be resolved very soon," Martin Heya, commissioner of petroleum at the ministry of energy and petroleum, told an east African oil and gas conference.

Both Tullow and Africa Oil struck oil on the two blocks last year and are in the process of determining whether the find has commercial potential.

In July, London-listed Tullow, which is already producing oil off Ghana and awaiting Ugandan government approval to develop its finds in Uganda's Lake Albert Rift Basin, estimated resource volumes in the Lokichar Basin in northwest Kenya at 300 million barrels of crude oil.

Keith Hill, chief executive officer of Africa Oil, said the demonstrations forced the firms to stop operations, to prevent the situation escalating into violence.

"We hope to be back to work in a matter of days or weeks, not weeks or months," Hill told Reuters on the sidelines of the conference.

"The issues in Turkana are jobs and being able to be involved in contracts. But there are some jobs that need to be done by other types of people from other parts of Kenya and other parts of the world."


Tullow says more than 800 of the 1,400 employees in its Kenya operations are from the Turkana region.

Hill said they wanted to train more potential employees from the local community, to increase the number of staff from the region.

"That is the ultimate goal but it's not going to happen overnight," he told Reuters.

Tullow Oil holds a 50 percent stake and is the operator at both the 13T and 10BB blocks, with Africa Oil its sole partner.

Kenyan police said they had summoned two regional members of parliament from Turkana for questioning in connection with the protests.

"We are looking for two Kenyan legislators James Lomenen and Nicholas Ngikor to record a statement with the police since the utterances they made in public amounted to incitement to violence," Ndegwa Muhoro, head of the Criminal Investigation Department (CID) told Reuters.

"We have been looking for the two politicians since Sunday but they have gone underground. We are conducting our investigations and hope to institute a case against them."

Lomenen said that he was aware he had been summoned by police and that he was ready to record a statement. Ngikor could not be immediately reached for comment.

Hill said in a presentation to the conference that the company plans to drill about 15 more wells in the Lokichar Basin next year.

"By the end of next year we would have pretty much drilled all these wells," he said.