LOKICHAR, TURKANA COUNTY, KENYA–President Uhuru Kenyatta over the weekend flagged off the first consignment of crude oil destined for export from Kenya. With Oil  billed to becoming a major contributor to the nation’s economy, the President flagged off trucks loaded with crude oil from Ngamia 8, in the Turkana oil fields as part of the Early Oil Pilot Scheme. “A great day for Kenya,” the President wrote in the visitor’s book on arrival at Ngamia in the Turkana heartland. Kenya is using the Early Oil Pilot Scheme, which will soon be followed by the Full Field Development phase, to establish itself as a crude oil exporter in the region and provide valuable information for future exploration and development. “This flag-off event and the anticipated implementation of the Early Oil Pilot (EOP) Scheme marks the beginning of a long and fruitful journey,” said President Kenyatta when he spoke after flagging off the crude oil laden trucks. The President, who was accompanied by Deputy President William Ruto, said what Kenya stands to gain from the production and exportation of petroleum products cannot be understated. He said the production of petroleum products will strengthen the existing economic and commercial partnerships and enhance the opportunities for growth and investments within the country. “My Government will therefore focus on the development of our oil and gas sectors for the betterment of the economy and people,” said the President. The President said the initial petroleum exports will complement the country’s existing development projects under the BIG...

Works on a 250-metre bridge linking the port of Mombasa to the standard gauge railway (SGR) Mombasa terminus is complete in an upgrade that will drop the use of trucks to feed goods from ships to the rail. The bridge will connect with a 2.7-kilometre rail extension from SGR terminus to shipping cargo dispatch bays. This will remove the need to use road trucks in what is expected to lower cost of transport and swiftly move goods on SGR. “Construction works on the cross-bridge connecting the port of Mombasa and the standard gauge railway at Mombasa terminus is complete. The 250-metre radius bridge is part of the 2.726 km SGR Port Relief Line that will cover 10 berths at the Mombasa Port,” said China Communication Construction Company in a statement Monday. The move is aimed at facilitating easier movement of bulky and heavy goods such as clinker, steel, iron and cement into the SGR. The 10 berths are currently connected to the SGR terminus via a road. The Kenya Port Authority have been offloading goods via cranes and transporting them via trucks to the SGR line. The SGR freight service, which  started operations last December, has struggled to find  more customers despite rock bottom prices. It is currently charging freighters a flat fee of Sh35,000 for a 20-foot container and Sh40,000 for a  40-foot type from Mombasa to Embakasi Inland Container Depot (ICD). It also charges Sh25,000 to transport a 20-foot container and  Sh30,000 for  a 40-foot container from ICD...

Kenya has launched a pilot scheme to export crude oil via Mombasa as part of efforts to capitalise on the country's oil reserves. The East African country discovered commercial oil reserves in its Lokichar basin in 2012 and a 800 km (500 mile) pipeline is due to be built before production starts up in 2021/22. The national government and the regional administration of the northwestern Turkana region agreed last month on revenue sharing that will come into force when production reaches full capacity by 2022. That agreement paved the way for the passage of a law on petroleum production, which will enable Tullow Oil - which operates the Kenyan fields - to start shipping oil that has been held in storage tanks for a year. "The benefits of the project will be shared and no one will be left behind," Deputy President William Ruto said at the launch of the export initiative under which 2,000 barrels will be transported to Mombasa by road for shipment each day. Tullow has hired Wood Group to design the pipeline needed to bring crude from Lokichar's onshore fields to a port in Lamu along the Indian Ocean coast. The cost of the pipeline is estimated at $1.1-billion, with a further $2.9-billion needed for upstream operations, the company says. Tullow has said the Amosing and Ngamia fields in the basin have estimated contingent resources of about 560 million barrels, with plateau production potentially reaching 100 000 bbl/d. Source: Engineering News

The Port of Mombasa has received four new eco-hoppers supplied by a UK-based company, Samson Materials Handling. "They were procured by Trademark East Africa (TMA) on behalf of KPA at a total cost of US dollars 6,206,024," Kenya Ports Authority(KPA) said in a communication. Speaking while witnessing the offloading of the eco-hoppers at Berth No. 5, KPA General Manager Operations and Harbour Master Captain William Ruto, said the acquisition of the equipment means cargo discharge rate at the Port would improve from the current 3,000 tonnes per day per ship to 10,000 tonnes. The successful delivery and discharge of the eco-hoppers completes in part the implementation of the Green Port Policy developed and adopted in 2014/15. The use of eco-hoppers in handling dirty import cargo such as clinker, coal and gypsum is chief among KPA's initiatives in furtherance to its stated core values including care for staff and communities while being sensitive to the environment. "The state-of-the-art eco-hoppers are mobile power-driven units with crabbing functionality to enable specific positioning of the hoppers alongside the ship. On top of the 6m x 6m eco hopper inlet grill is a 2m high shroud which creates a mouth of 8.2 x 8.2m for grab discharge thus mitigating the effects of high winds," KPA said over the weekend. Each eco-hopper sits on a frame adding up the total height to 15.7m permitting a comfortable truck drive-through clearance of 4.2m. Source: Hivisasa

Rwanda, Tanzania and Uganda are the key destinations for high-skilled Kenyan migrants, attracted by opportunities in financial, IT, engineering and hospitality sectors, a new UN report showed. The United Nations Conference on Trade and Development (UNCTAD) said labour shortages in information technology, engineering, finance, hospitality and management in some regional markets in Eastern Africa have fuelled migration of professionals from the region, some of them young. “Rwanda is a major destination for migrants from Kenya and Uganda and has attracted highly skilled professionals. Its burgeoning information technology sector has driven labour mobility among young highly skilled migrants from Kenya, who have taken advantage of economic opportunities in the sector, and demand in financial services and other skill-intensive sectors in Uganda and the United Republic of Tanzania has also fuelled mobility among professionals from Kenya” the agency said. Mutual recognition agreements between various professional bodies within the East African Community (EAC) allow for cross-border practices among professionals and accord experts from partner States in accounting, architecture, dentistry, medicine and engineering to the same treatment as nationals. “Such agreements, along with the abolition of work permits by some EAC partner States, have been vital in facilitating labour mobility among highly skilled professionals within the region. Regional investment in economic sectors, besides creating labour demand in specific sectors, has also become an important driver of intraregional economic migration” UNCTAD noted. Highly skilled migrants tend to earn relatively high incomes in destinations. “For example, skilled Nigerian migrants in Ghana and South Africa have household...

Kenya has for months been feuding with Tanzania and Uganda over the treatment of its confectionery products in the regional market. The bone of contention has been a 25 per cent tax that the two East African Community partners have been imposing on products with industrial sugar. And with every indication that the community’s trade dispute resolution structures may not rule in its favour, Kenya has threatened Tanzania and Uganda with retaliatory action should the standoff persist beyond July 1. The two neighbours have dared Nairobi to make good its threat. We wish to state that such kind of grandstanding is unnecessary among countries that belong to a single regional market. The East African Community integration, as revived 18 years ago, has clear laws that all members must obey to keep it alive. Playing by the community’s rules is the only way out of the current crisis. Otherwise the game of musical chairs can play forever. Lest we forget, Kenya has always asked for a stay of the remission scheme on industrial sugar on the understanding that products such as biscuits, chocolate, ice cream and sweets would be priced competitively for export market. That’s how the East African Customs Management Act (EACMA) states it. When such goods are diverted into any of the five six integrating countries – which EACMA regards as a single customs territory - such products are deemed to have come from outside EAC, and as such attract 25 per cent import duty. According to EACMA, similar treatment must be meted out...

Kenya has reached out to Botswana, again, in a bid to raise trade volumes that have stayed below targets for both countries two years after they signed a trade deal. Foreign and International Trade Cabinet Administrative Secretary Ababu Namwamba told a forum the two countries should take advantage of cordial political relations to foster business. Mr Namwamba who was speaking at the second Kenya-Botswana Diaspora Investment Forum held on Saturday at Fairgrounds Holdings, Gaborone, said it was disappointing that trade volumes have not improved despite existing transport networks and good ties between the two countries. “We have agreed to revisit a 2016 Memorandum of Understanding that clearly stipulates how our two countries can trade better and increase the volumes which as we speak remain way below potential,” Mr Namwamba said. MoU He was referring to the November 2016 MoU signed between Nairobi and Gaborone to build their trade and Investment partnerships in agriculture, agribusiness, Information and Communication Technologies, horticulture and manufacturing among others. This agreement had followed President Uhuru Kenyatta’s June 2016 visit to Gaborone when he attended the Botswana-Kenya Business Forum and held talks with then Botswana’s President, Ian Khama. Yet that deal appears not to have spurred trade volumes. Kenyan sold to Botswana goods worth Ksh451 million ($4.5 million), according to records available at the Foreign Affairs ministry in 2016. This was nearly half the volume recorded in 2014. Much of the problem has been that both countries trade similar goods. Kenya’s main imports from Botswana are general...

Nairobi has given Tanzania and Uganda one more month to lift a ban on duty-free entry of Kenya-made sweets or face retaliatory action from July 1. Dar and Kampala slapped a 25 per cent import duty on Kenyan confectionery, juice, ice cream and chewing gum earlier in the year, claiming use of zero-rated industrial sugar imports. Trade Principal Secretary Chris Kiptoo said revenue and standards bodies from both countries will separately visit Kenyan factories from June 11 in a bid to resolve the trade spat. “We will make the decision after the verification. We will retaliate (because) that’s always there for us any time, but first let’s allow this process to go on,” he said following the five-day EAC Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) meeting in Arusha that ended last Wednesday. “A decision will be made by June 30 and communication will be made by the EAC secretariat on the findings of that verification. But we don’t want the verification process to be a moving the goal posts exercise.” The verification process, to be supervised by the East African Community’s secretariat, will extend to factories making other products such as cement, lubricants, cosmetics and wooden pallets which have also had difficulties gaining free access into Tanzania. Dr Kiptoo said Tanzania and Uganda have own lists of Kenyan products they suspect do not meet the rules of origin, which forms the basis for qualification for duty-free market access within EAC under the common market protocol of July...

Kenyas earnings from the United States horticulture market is set to rise to Sh10billion on direct Nairobi to New York flight scheduled to start in October. Kenya Flower Council chief executive Clement Tulezi said in an interview that the country is currently earning less than a billion from the US market. Earnings from the Horticulture sector hit Sh115 billion last year from Sh101 billion announced in 2016. Companies licensed to export the flowers also increased to 386 from 356 in 2016. The total export volumes increased by 26,303 tons to159,961 tons in the said period while the value rose to 82.25 billion from 70.8 billion. “We also expect that the direct flights would increase our Share of the US market from the current 0.4 per cent to 10 per cent,” Tulezi said. Outgoing head of the horticulture directorate Zakayo Magara said in a separate interview that the flight will open up the flower sector to a market of over 1 billion people. FLOWER EXPO In the forthcoming seventh edition of the International Flower Trade Expo planned to kick off on Wednesday in Nairobi, atleast 10 US firms will be present as buyers. Speaking to the Star, IFTEX chief executive Dick Van said the US firms will be scouting for deals ahead of the Nairobi-New York flights. He said the flights will cut the long process of getting the flowers to US via Amsterdam. Over 90 per cent of all flowers grown in the country will be exhibited at the trade...

President Uhuru Kenyatta yesterday flagged off the first four tracks carrying 600 barrels of oil under the Early Oil Pilot Scheme at the Ngamia 8 oil well in Turkana County. The country is targeting to transport 2,000 barrels per day to Changamwe storage tanks under this scheme. This means the country's first oil exports are expected to begin in December given that it will take at least 400,000 barrels to fill one oil tanker ship. "Today, Kenya becomes the first country in East Africa to export oil. I thank all investors who believe in this project that is expected to turnaround social economic life for not only Turkana and Kenya, but the region at large," he said. The President thanked Turkana county leaders for accepting his invitation to discuss and agree on revenue distribution adding that the agreement would be ratified in parliament this week. Under the new deal, National Government will receive 75 per cent of proceeds from oil exports while the county government will receive 20 and five per cent respectively. The EOPS had been postponed since June 2017 due to disputes over how revenue would be shared. PIPELINE PLANS Last week, Tullow Oil picked Britain firm, Wood to design the proposed Lokichar to Lamu Crude Oil Pipeline. The firm will provide the first phase of front-end engineering (FEED) services, setting the technical requirements and estimating the installed cost for the pipeline system. “We are delighted to be working with the Pipeline Project Management Team on this project...