Crude oil deposits discovered in Kenya are insufficient to justify construction of a refinery, a senior petroleum ministry official said on Tuesday. Kenya discovered commercial oil in 2012 in its Lokichar basin, which Tullow Oil estimates contains an estimated 560 million barrels in proven and probable reserves. Tullow has said this would translate to 60,000 to 100,000 barrels per day of gross production.
It is proven the world over that a refinery would make money only when it has refining capacity of at least 400,000 barrels a day, Andrew Kamau, principal secretary at the petroleum and mining ministry, told reporters. “And we have 80,000 barrels a day, so where are we going to make money on that? We can import cheaper from India,” he added. Kenya, which does not export any oil, previously had a crude oil refinery at its port city of Mombasa but halted operations in 2013 after plans for a $1.2 billion upgrade were abandoned on the advice of consultants who said it was not economically viable.