Kenya: Oil companies don’t drill; they develop Low oil prices have caused oil companies to stop drilling, but they have spent millions on regions where oil is found

NAIROBI, Kenya (AA) – Oil companies in Kenya aren’t drilling for oil, but they are spending millions to develop the poor regions where oil is found.

The low price of oil has caused companies to stop drilling for the energy source in the rich oil fields of Turkana, in northwestern Kenya, and even to stop selling it. But infrastructure investment by oil companies working in the region is changing the lives of the Turkana people where 94 percent of the people have lived in poverty and where illiteracy levels stand at 87 percent, and where raising animals is the main economic activity of the nomadic inhabitants.

Unemployment, illiteracy and inter-community conflicts have further worsened the poverty rates of the Turkana people. Until recently, residents were obliged to travel unpaved roads to get murky water for drinking.

But that all changed after 2012, when Tullow Oil, which had been exploring in Turkana County, struck oil.

There was an influx of foreigners with hard currency into the area, and the company built tarmacked roads for their on-land oil rigs. Commercial housing was swiftly constructed for the arriving oil workers as well.

Turkana governor Josephat Nanok told Anadolu Agency on Wednesday that the oil companies have not stopped providing a number of community development programs.

“There has been massive development since the discovery of large water aquifers that could provide clean water for Kenya for more than 70 years in this area. The oil companies have built roads and have engaged in community projects to better the lives of the Turkana people,” Nanok said.

”The oil companies’ engagement with our community has been very broad since 2012. Our county has experienced change in many sectors due to the discovery of the resources,” he added.

Business boomed for Turkana businesses which had found new buyers for their products. Prices of desert land skyrocketed, with many property owners selling portions of their land. And, with capital earned from property sales, residents began building homes, hotels and warehouses on the rest of their property.

Thousands of locals were employed to build the tallest building in Turkana town, a two-story residential building.

Some towns like Lokichar, which had been filled with rundown houses made of sticks and mud mixed with cow dung, saw Kenyans and foreigners rushing to buy large parcels of the dry barren land to build modern houses.

Banks started opening branches in the area to serve growing businesses and residents who now had more income.

When oil prices slumped in 2014, however, all of the oil companies chose to hold off on exploration and drilling. But development of the region continues, and Turkana county is now firmly ensconced in a modern economy.

But the price of oil will eventually rise, bringing increased prosperity to all the oil-producing regions in Kenya’s “great rift” area, according to David Owiro, a business analyst from the Institute of Economic Affairs. He told Anadolu Agency on Wednesday that once production starts, there will be a further influx of cash and new jobs.

“When Kenya joins the ranks of oil exporting nations, our GDP will double, the Kenyan shilling will strengthen due to the reduced oil imports, and the number of job opportunities in the country will increase, boosting the Kenyan economy,” Owiro said.

Areas like Turkana County may profit further from oil production, Owiro said, if the government institutes revenue sharing plans in the areas where mining is being conducted.

© 2016, Andrew Ross. All rights reserved. – The views expressed here are purely those of the author and not necessarily those of the publishers. – Newstime Africa content cannot be reproduced in any form – electronic or print – without prior consent of the Publishers. Copyright infringement will be pursued and perpetrators prosecuted.

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