Tullow Oil demonstrations – analysis

According to analysts, Tullow Oil’s suspension of drilling in Kenya after weekend protests shows “popular impatience for a share of the spoils is compounding the problems energy firms face building an oil and gas industry from scratch in east Africa.”

Backed by local politicians, demonstrators from Kenya’s poor, northern Turkana community marched on Tullow sites demanding jobs and other benefits, prompting one of Sub-Saharan Africa’s most experienced oil explorers to halt work. Grievances in the local community erupted into protests around at least two of its drilling sites, demanding more jobs and contracts.

Local populations are anxious for a windfall, but production may be years away, and such direct action is only likely to slow the region’s emergence as a significant producer, analysts said.

“We welcome them [Tullow] to Turkana. But we want to start benefiting as early as possible,” said James Lomenen, a regional member of parliament who joined the protest at Twiga South-1 site. He said he saw workers evacuated from the site. An industry source, however, described a “very tense” scene, and a senior Kenyan energy ministry official, Martin Heya, said politicians, whom he did not name, had stirred things up.

Other news reports suggested that locals had “stormed” Tullow’s facilities and that two parliamentarians had marshalled local residents to march to Tullow’s camps demanding for jobs for the locals and supply contracts for the communities. Over 2000 Turkana residents matched into the two camps in an incident that saw some looting of Tullow properties. No one was injured during the skirmish, Tullow Oil officials said.

Read more: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/tullows-kenya-drilling-shutdown-tempers-east-african-oil-ambitions/article15120367/

And: http://allafrica.com/stories/201310281428.html

Furthermore, Tullow Oil’s share price slipped after news broke that it temporarily suspended drilling operations in northern Kenya following demonstrations by local communities regarding concerns around employment in the Turkana region. Yesterday afternoon, Tullow was down 13p at 965.5p.

http://www.theguardian.com/business/marketforceslive/2013/oct/28/tullow-oil-halts-kenya-drilling

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2 thoughts on “Tullow Oil demonstrations – analysis

    • Obviously it is difficult to judge, but the locals appear angry and forcing Tullow to stop operations is a major step to take and should not be underestimated. I can’t imagine that the locals will back down too easily and, from what I have heard on the ground, the situation is still quite tense.

      However, the locals are being widely condemned by the rest of Kenya, who have seemingly sided with Tullow. The locals’ decision to ‘storm’ Tullow’s facilities could certainly be seen as an overreaction and irresponsible, and they may bow to public pressure.

      Just to further the discussion, it is difficult to know who’s right, but I do recommend reading this article which gives an interesting spin on the locals’ point of view.

      Nevertheless, it is definitely worth keeping an eye on the situation. While it could spiral, it could be just as easily be resolved with a bit of decent diplomacy.

      And thanks very much for reading my blog and thanks for the comment!

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