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Story Publication logo January 8, 2015

From Gushers to Glue: Should Kenya's Oil be Coming Out of the Ground at All?

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Turkana, Kenya. Image by Guillaume Bonn. Kenya, 2014.
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Turkana in Kenya's arid north is the most important place you've likely never heard of...

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On a Tullow oil rig in Turkana County, an arid region, long neglected by successive Kenyan administrations. Image by Guillaume Bonn. Kenya, 2014.

Patillo Higgins was a one-armed mechanic and self-taught geologist born in Texas in 1863. At the turn of the 20th century, he believed that the future for modern industry lay not in coal, but in oil. The problem was where to find that oil. Higgins was convinced that large quantities lay beneath Spindletop Hill in southern Texas, a hill formed by a dome of sub-surface salt in an area where the earth dribbled sulphur and burped flammable gas. So Higgins formed a company to find it. But after nearly a decade of drilling, they'd come up with nothing.

Widely considered mad, but still undeterred, Higgins battled on. On 10 January 1901, his team drilled to 1,020 feet. Mud started bubbling out of the ground, then the drill bit shot out of the ground. Then nothing. Rig workers were starting to reassemble their gear when they heard an explosion beneath them. Mud, followed by gas, followed by green-black oil erupted out of the hole, reaching a height of 150 feet. The Lucas Gusher, named after Higgins' partner, towered above the drill rig. The well that operators had hoped would produce five barrels a day initially produced almost 100,000 – more oil than had ever been seen in the world. Higgins was henceforth the Prophet of Spindletop and the modern oil industry was born.

Gushers, blowouts and wild wells, as they're called when oil bursts from the ground like this, came to symbolise the oil exploration of the early part of the last century. But the more oil we suck out, the harder extracting it becomes. Today, we're coaxing out sloth-like treacle, and going to great pains to move it anywhere after that.

Mature oil fields are becoming less productive, and new alternatives––such as the East African Rift system––are difficult and expensive to exploit. But soaring demand and an expectation of continuing high prices incentivised companies to turn to them. East Africa is one of the key emerging regions, despite its particularly waxy crude and the challenging socio-political operating environment, with corrupt governments, inter-communal conflicts, and cultural and environmental sensitivities. In 2012, Anglo-Irish Tullow Oil struck oil in Kenya's northernmost county, Turkana, where the borders of South Sudan and Ethiopia meet. Exploration since has suggested there are 600 million barrels beneath the arid land. But Turkana's oil sticks with the regional trend: one expert described it as "basically like glue". So, how to extract this subterranean adhesive?

In Turkana, a large quantity of water will be required, which will be pumped in to displace the oil. But where will that water come from? The aquifer that was hailed the saviour of the Turkana's woes thanks to exuberant media coverage is proving hard to find, Tullow's water engineers say. So far, they are struggling to find enough for even the extraction phase. Other options include bringing water from the sea, a thousand kilometre, week-long drive away, or the lake, which is already under threat. Clearly neither is ideal.

Because it's thick and sticky, the oil is then going to require a $4 billion heated pipeline, the longest in the world, to get it to the coast for export or refining.

Meanwhile, the communities living on top of Turkana's oil are currently angry and demanding more jobs from the oil companies. Yet this, the exploration phase, is likely to be as good as it's ever going to get for the locals in employment terms. Exploration has the greatest requirement for unskilled and semi-skilled labour, and the jobs will only exist until the infrastructure is finished. "After that, the employment requirement shrinks to almost zero with a few semi-automated facilities run by technicians. Unless the local economy has been diversified by the time they go into full production it will be a bit of a boom and bust affair for the people who are living there," an oil and gas expert in East Africa says.

While working on this story, there is one fundamental question that I didn't address but will do now: Should Kenya's oil be coming out of the ground at all? Should we be thinking more like Higgins; trying to turn the tide on oil, just as he sought to end our reliance on coal? In November 2014, Barack Obama's climate change envoy said that countries may have to abandon known reserves of oil and gas to solve global warning. Climate experts advocate for an expiry date on oil, that would create the imperative for a more sustainable, less environmentally detrimental solution.

In Ghana, which is commonly hailed as Africa's oil producing success story, the government's overspend in expectation of oil returns contributed to the record currency crash that required the IMF to prop them up. Production volumes never reached the expected levels, and what revenue was created went mostly to the oil companies who needed to recoup their costs.

The Kenyan government, which is already racking up huge debts to finance a new railway, roads, port and power infrastructure, will have to take out a multi-billion dollar loan for the pipeline. Oil prices, meanwhile, are dropping. The financials for Turkana was done when oil prices were looking set to stay high. But will those high prices be there when they go into production? Of course there will be highs and lows but, if they're low at the start, as the East Africa oil and gas expert I interviewed says, "it could lead to a very wobbly start."

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