Beating the resource curse: Transparency in Kenya's upstream oil and gas sector

Brunton, Sally Lesley (2018-03)

Thesis (MA)--Stellenbosch University, 2018.

Thesis

ENGLISH ABSTRACT: In 2012 Tullow Oil plc discovered commercial quantities of crude oil onshore Kenya. Additional commercial discoveries have subsequently been made and estimates suggest that Kenya’s oil reserves are substantial. Steps towards the development and production of these reserves are progressing and Kenya is thus preparing to become another of sub-Saharan Africa’s oil-exporting states. Nevertheless, experience has shown that the majority of these resource-rich states have succumbed to symptoms of the ‘resource curse’: economic and human development and growth has been hindered rather than helped and many of these states find themselves struggling to escape from the clutches of rent-seeking, bribery and corruption. In an attempt to determine how best Kenya might avoid the negative impacts of the curse this study examines various strands of resource curse theory. It focuses on theories that suggest the promotion of good governance through the implementation of effective transparency and accountability measures can help a state to beat the curse. Following a discussion about Kenya’s political culture and an overview of the structure of its oil and gas sector, this study applies these theories to the case of Kenya in order to ascertain how transparent its oil and gas sector is currently, what it stands to gain from further transparency and accountability, and what barriers might stand in the way. This study concludes that whilst the Kenyan government and international oil companies operating in Kenya offer rhetorical support for the promotion of effective transparency and accountability, this rhetoric is not matched in practice. Kenya’s oil and gas sector is characterised by opacity and its reform is currently in limbo. The primary reason for this appears to be a lack of government will to implement change: Kenya’s political culture is inherently secretive and this in turn lends itself to the continued prevalence of bribery, corruption and ethnically-motivated patronage. International oil companies, civil society and the international community each have a role to play in promoting transparency initiatives and face certain challenges of their own, however without government support there is little hope that such initiatives will progress from rhetoric to reality. This study ultimately shows that unless and until Kenya’s oil and gas sector embraces transparency, its positive impact on the state’s development is likely to be thwarted.

AFRIKAANSE OPSOMMING: Tullow Oil het in 2012 kommersieel benutbare ruoliebronne in Kenia ontdek. Verdere ontginbare bronne is sedertdien gevind en volgens beramings bevat Kenia omvatryke oliereserwes. Die ontwikkeling en benutting van hierdie bronne kom tans op dreef, en Kenia gaan binnekort nog een van die olieproduserende state suid van die Sahara wees. Ervaring toon egter dat die meerderheid van hierdie natuurlike-hulpbronryke lande aan ‘n ‘hulpbronvloek’ ly: die ekonomiese groei en maatskaplike ontwikkeling word in werklikheid belemmer in plaas van aangemoedig, en menigte state sukkel om uit die kloue van wanbestuur, korrupsie, en omkoping te ontsnap. Hierdie studie gebruik verskeie aspekte van hulpbronvloekteorie om te probeer bepaal hoe Kenia die negatiewe aspekte van sy oliefondse moontlik kan vryspring. Daar word op teorië gefokus wat aandui dat die bevordering van goeie regeringbestuur, deur die aanwending van deursigtige administrasie en verantwoordbaarheid, ‘n land kan help om die hulpbronvloek te bestry. Nadat Kenia se politiese kultuur bespreek en ‘n oorsig van sy olie- en gassektore gegee is, word hierdie teorië op die Kenia toegepas om te bepaal hoe deursigtig sy olie- en gassektore tans is, die baat wat hy by verbeterde deursigtigheid en verantwoordbaarheid kan vind, en die struikelblokke wat dit moontlik kan verhoed. Daar word tot die gevolgtrekking gekom dat alhoewel die Keniaanse regering en internasionale oliemaatskappye skynbaar deursigtigheid en verantwoorbaarheid wil bevorder, hierdie lippediens nie met die werklikheid strook nie. Kenia se olie- en gassektore word gekenmerk deur ondeursigtigheid en die hervormingspogings sloer. Die hoofrede hiervoor blyk ‘n gebrek aan wil te wees vanaf regeringskant om verandering aan te bring: Kenia se politieke kultuur is in wese geheimhoudend en bied ‘n ryke teelaarde vir voortdurende omkopery, korrupsie, en etniese begunstiging. Internasionale oliemaatskappye, die burgerlike samelewing en die internasionale gemeenskap kan elkeen ‘n bydra lewer om deursigtigheidsinisiatiewe te bevorder, en word elkeen deur sy eie uitdagings in die gesig gestaar, maar sonder ondersteuning vanaf die regering is die kans klein dat sulke insiatiewe ooit sal slaag. Hierdie studie dui uiteindelik daarop dat die positiewe impak van Kenia se gasen olie-industrie op die land se ontwikkeling belemmer sal word, tensy die sektore werklik deursigtigheid omarm.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/103325
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