[Updated] The US spearheads $18 billion Fundraising Effort for 500-mile Kenyan Oil Pipeline

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[Updated] The US spearheads $18 billion Fundraising Effort for 500-mile Kenyan Oil Pipeline

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The U.S. government said this week that it would help Kenya find the estimated $18 billion needed to construct an oil pipeline from Lamu on the Kenyan coast to the oil fields located in an area called the "great rift" in the north of the country.

“Kenya needs $18 billion worth of financing, [for the construction of the pipeline] so one of the questions we are discussing is how we can work together with the private sector and governments to raise that sum, to find ways to make certain that this financing become available,” said Robert Godec, U.S. Ambassador to Kenya.

While there are proven reserves in the great rift of about 1 billion barrels, according to data from the African researcher Ecobank, a protracted low oil price environment complicates any oil extraction from the region. Indeed African - focussed oil companies such as Tullow and Shell, et al., seem to be sitting on the fence until the price environment improves.

The Kenyan government is, however, keen to get extraction started.

“I think that we need to fast track this project so that we join the many countries who are exporters of oil, and so that we can lower the cost of fuel in the country,” Alfred Keter, Kenyan Energy Secretary, told reporters.

Update 15 January 2016:

The US Embassy in Nairobi has disavowed a statement allegedly made by Ambassador Robert Godec this week regarding US financial support for the Lamu Port-South Sudan-Ethiopia Transport oil pipeline project. In a statement on Wednesday, the US said that Mr Godec did not say that the US government would help finance the construction of the pipeline. However, according to the statement, Mr. Godec did encourage a consortium of US companies to participate in the pipeline project. Questions leading to the disavowal arose after an article appeared in the Wall Street Journal concerning the willingness of US taxpayers financing a multibillion dollar pipeline project in Africa.

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