An offshore company is among the first to reap hundreds of millions of shillings from the Kenyan oil that was discovered six years ago.
Primefuels Holdings Ltd, based in the highly-secretive Guernsey Channel Islands, has leased the equipment for trucking of crude from the Turkana oil fields. Its local subsidiary, Primefuels Kenya Ltd, will grab the biggest chunk of the Sh1.5 billion budgeted to pay transporters who include smaller local firms.
Company records indicate the offshore firm owns all except one of the 750,000 shares in Primefuels Kenya. The single share is held by Hanif Amirali Somji.
President flagged off four of the 110 insulated containers to be supplied by the company for the journey to the coastal city of Mombasa for storage.
Nairobi-based logistics firm Multiple Hauliers, owned by billionaire Rajinder Singh Baryan, and Oilfield Movers associated with former National Oil boss Nyaga Mwendia, are the hauliers. Efforts to reach Mr Nyaga were fruitless as his phone went unanswered.
Founded as a Kenyan firm by Asif Abdulla in 1996, the firm now has its operations in five countries in the region and possibly got new directors before its ownership was taken offshore. Registering firms in secretive jurisdictions including Guernsey Channel Islands provides a layer of protection for the real owners, since company records are not readily available.
Sunil Edupuganti, the operations manager, told The Standard of his excitement about the actual start of the crude oil transportation. The contract was awarded a year ago.
“It is lucrative for us as a firm and we are excited to be part of the deal,” he said in a telephone interview yesterday.
He added that the contract runs for three years, translating to assured business as Kenya spares no cent in its push to join the exclusive club of petroleum-producing countries. The President admitted in Turkana that crude oil trucking under the Early Oil Pilot Scheme would be a money-burning venture.
Except suppliers to the oil exploration firm Tullow, the three logistics companies are drawing profits from the actual crude ahead of the country, which would receive the first shilling some time in 2018 at the earliest. This is because moving the oil by road would take at least eight months before there are sufficient stockpiles in Mombasa for export.
The Ministry of Energy has however defended the programme, saying it is a worthy experiment to gauge how the market will price Kenyan oil. Each of the insulated containers has the capacity to carry 150 barrels, which is equivalent to about 24,000 litres.
Initial projections indicate 2,000 barrels will be trucked from the oil fields to the storage tanks daily, before doubling to full capacity over time. Mr Edupuganti said he was awaiting approving from Tullow and the Government before making orders for 50 additional transtainers – bringing the total to 110.
But with just as many trucks on the road, each taking at least three days to cover the 1,100km, achieving the 2,000 barrels a day is already a tall order. Struggling parastatal Kenya Railways Corporation had hoped to land a portion of the lucrative business by transporting the oil from Eldoret to Mombasa on the old railway line but failed to convince the State.
Economist David Ndii claimed in a social media post yesterday that the Early Oil Pilot Scheme could have offered a lifeline for the old railway to survive (competition from) the SGR