Energy and Petroleum Cabinet Secretary Opiyo Wandayi has clarified that the government discontinued operations at the Mombasa oil refinery in Changamwe due to commercial unviability, choosing to invest in a Tanzanian refinery instead.
During a Senate plenary session on May 6, Wandayi elaborated that the decision resulted from thorough economic evaluations, while Kenya prepares to start crude oil extraction in South Lokichar, Turkana.
“A refinery operation fundamentally depends on commercial feasibility. It must be economically justifiable to establish a refinery. The Changamwe facility, based on economic analysis, was deemed commercially unviable, leading to its cessation,” Wandayi explained.
The CS was addressing a query from Mombasa Senator Mohamed Faki, who questioned why the government was investing in a Tanzanian refinery despite leasing the Changamwe plant to a foreign entity.
“Can the Minister clarify under what conditions the government prioritizes foreign investment over upgrading the existing Mombasa facility, which would be more economical than constructing a new refinery abroad,” Faki inquired.
According to the Senator, the Mombasa refinery has reportedly been leased to a Nigerian investor without public consultation.
In his response, Wandayi indicated that rather than funding a refinery exclusively for Kenya, the government supports regional initiatives involving Kenya, Tanzania, Uganda, and South Sudan.
He characterized the strategy as a matter of economic rationality and regional cooperation, contending that a shared, larger refinery would prove more sustainable than an isolated Kenyan operation.
“This approach supports establishing a Tanga refinery that will not only benefit Kenya but also neighboring nations including Tanzania, Uganda, South Sudan, and others,” he emphasized.
Regarding the inability to revive the Changamwe facility despite upcoming oil production in Turkana, Wandayi mentioned that the anticipated oil volumes remain insufficient for commercial refinery operations.
“Even with the upcoming oil drilling in South Lokichar, the expected quantities are insufficient to sustain a commercially viable refinery.”
Wandayi’s remarks coincide with efforts to develop a regional oil refinery in Tanzania’s Tanga area, supported by Nigerian billionaire Aliko Dangote.