Rotich Says Price Fall Won’t Derail Oil Investment in Kenya(Bloomberg) -- Kenyan Treasury Secretary Henry Rotich said he expects crude oil prices to recover and that their 47 percent decline over the past six months won’t affect the development of the local oil and gas industry. The East African nation, where crude deposits discovered in 2012 are being developed for production, is trying to position itself as the petroleum logistical hub for a region that includes oil-exporter South Sudan and Tanzania, which has estimated natural gas deposits of at least 50.5 trillion cubic feet. Japan’s Toyota Tsusho Corp. won a contract last year to supervise construction of an oil pipeline from Kenya to neighboring Uganda, where crude output may begin by 2018 amid plans to develop a 60,000 barrel-per-day oil refinery that will be partly owned by Uganda and other countries in the region. “We think the price drop is temporary,” Rotich said in a phone interview on Feb. 3 from the capital, Nairobi. The government won’t scale down anything, he said. Kenya will “prioritize” the building of a pipeline “in partnership with the private sector in order to position itself as a preferred regional petroleum transporter of choice,” the Treasury said in a budget document for 2015, a copy of which was seen by Bloomberg. In Kenya, first crude production is expected by the end of the decade, with the government having licensed 41 out of its 46 oil and gas blocks to 21 companies including Tullow Oil Plc, Africa Oil Corp., BG Group Plc, Eni SpA, Anadarko Petroleum Corp. and Total SA. Oil Interest After benchmark oil prices fell last year, Tullow cut its exploration and appraisal budget of $1 billion by more than two-thirds and said it will focus on onshore drilling in East Africa, where it’s been able to reduce well costs. Tullow may sell assets in Kenya as well as Ghana and Uganda to pay down “significant” debt commitments, RBC Capital Markets said in a Jan. 28 e-mailed note. “We have many companies talking to us to do exploration, development, and many have responded to invitations of investing in projects under our public-private partnership arrangement,” Energy Secretary Davis Chirchir said by phone. Statoil ASA, working with partner Exxon Mobil Corp., in Tanzania is developing “offshore gas discoveries into a commercially viable and robust liquefied natural gas project that can be sanctioned,” Statoil spokesman Knut Rostad said in an e-mailed response to questions. The country already produces gas for domestic consumption. Statoil said its financial plan was designed to withstand fluctuations in the oil price, which has traded in the range of $17 to $147 per barrel over the past 15 years. “The price level we see now is within the range that we have analyzed in our planning,” Rostad said. https://www.bloomberg.com/news/articles/2015-02-05/rotich-says-price-fall-won-t-derail-oil-investment-in-kenya