Kenya plans strategic oil reserve

Fri May 20, 2011 1:52pm GMT
 

By Mark Denge and Kevin Mwanza

NAIROBI (Reuters), May 20 - State-run National Oil Corporation of Kenya (NOCK) plans to invest up to 100 billion shillings to develop a strategic national petroleum reserve, the parastatal's top official said on Friday.

The reserve will hold about 1 billion litres -- equivalent to 90 days consumption -- and help ease disruptions in the supply chain.

NOCK said in a newspaper advertisement on Friday that it had sought consultants for a detailed feasibility study on the development and implementation of reserves across the east African nation.

"We are going to do a feasibility on which areas these reserves should be and how much it will cost," NOCK's acting managing director, Summaya Athmani, told Reuters on the sidelines of an energy sector stakeholders forum.

"We are doing a master plan not only in Kenya, but also in the region. On the basis of that we will then look at how much will we need and then build the reserves," she added.

Kenya, east Africa's largest economy, has no strategic reserves and relies solely on oil marketers' 21-day oil reserves required under industry regulations.

Athmani said that due to the heavy capital requirement needed to develop the reserves, the government was looking at partnering with the private sector and at building the storage facilities in phases.

NOCK was blamed for high fuel prices after it failed to deliver a consignment on time in March, increasing delivery costs after international oil prices rose.   Continued...

<p>A customer fuels her car with unleaded petrol at a Morrisons supermarket in Coalville, central England, October 15, 2008. REUTERS/Darren Staples</p>

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