The Kenya Pipeline Company (KPC) is searching for a consultant to help it assess the viability of the Mombasa Oil Refinery ahead of a planned acquisition.
KPC had also earlier hinted to plans to convert the refinery into an oil storage facility as the government gears up for commercial oil production in 2017.
“Kenya Pipeline Company Ltd invites sealed requests for proposals from eligible candidates for the provision of transaction advisory services for the acquisition of Kenya Petroleum Refineries Ltd,” it said in a statement in the dailies.
Treasury Secretary Henry Rotich had earlier said the fate of KPRL is now hinged on the crude oil that Kenya expects to export next year in a plan revised after government’s acquisition of new shares in the facility for Sh500 million following the exit of Essar Energy.
The government took over the management of the facility after it paid Sh500 million to acquire a 50 per cent stake previously owned by India’s Essar Energy.
The refinery has not been operational since 2013 after plans for a Sh120 billion upgrade were abandoned on the advice of consultants, who said it was not viable.
Mr Rotich said last month the government will decide whether to convert the Mombasa-based facility into a storage plant or upgrade the facility to refine crude oil from Turkana.
Discovered crude oil
Mr Rotich said a committee consisting of Ministry of Energy officials and the refinery management would settle on one of the options after the government finalised the acquisition of a 50 per cent stake in the plant held by India’s Essar Energy giving the government 100 per cent control.
“We have discovered crude oil in Kenya and we are going to review going forward whether the requirement for the refinery will be crucial going forward,” Mr Rotich said after the signing of the transaction to acquire the full stake of refinery.
In March, the government said it planned to convert the refinery into a storage plant to be run by the state-owned Kenya Pipeline Company.
But the planned export of crude could prompt a review of the plan, said Mr Rotich.
Africa Oil and partner Tullow Oil, which first struck oil in Lokichar in Turkana in 2012, have said they could start small-scale production of crude, transported by road and rail to Mombasa, in 2017.
“The committee is looking at all options. In the near future we will know what we will do with KPRL,” Mr Rotich said.
The Transaction Advisor is expected to carry out due diligence on the assets and liabilities of KPRL. KPRL has remained inactive since 2013, after plans for a Sh121 billion upgrade of the facilities were abandoned with the government arguing it was not economically viable.