NAIROBI, Kenya — Energy and Petroleum Cabinet Secretary Opiyo Wandayi has defended the government’s decision to abandon the Mombasa oil refinery, saying the facility was no longer commercially viable, as Kenya pivots toward a regional refinery project in Tanzania.
Appearing before the Senate on Wednesday, Wandayi said economic assessments showed the refinery in Changamwe could not sustain profitable operations, prompting the State to discontinue its use despite renewed interest following planned crude oil production in Turkana.
“A refinery business is a matter of commercial logic. It must make business sense,” Wandayi told senators. “The refinery in Changamwe, due to the economics, was found not to make business sense, and that’s why operations at the facility were discontinued.”
The CS was responding to concerns raised by Mombasa Senator Mohamed Faki, who questioned why the government would invest in a refinery outside Kenya while a domestic facility exists and could potentially be upgraded at a lower cost.
Faki also alleged that the Changamwe refinery had been leased to a foreign—reportedly Nigerian—investor without adequate public participation, raising governance and transparency concerns.
In response, Wandayi said the government’s strategy is shifting from a national refinery model to a regional approach, backing plans for a larger facility in Tanga that would serve multiple East African countries, including Kenya, Uganda, and South Sudan.
“That informs the basis for the plan to establish a refinery in Tanga that will serve not only Kenya, but also neighbouring countries,” he said, framing the move as one driven by economies of scale and regional efficiency.
The proposed refinery has reportedly attracted interest from investors, including Nigerian industrialist Aliko Dangote, amid broader efforts to integrate energy infrastructure across East Africa.
Wandayi further argued that anticipated crude oil output from South Lokichar—where Kenya is preparing to begin production—would still fall short of volumes required to sustain a standalone commercial refinery.
“Even with the impending drilling of oil in South Lokichar, the quantities envisaged are not adequate to run a commercial refinery,” he said.
The explanation comes as Kenya revisits its long-delayed oil ambitions and regional energy partnerships, with policymakers weighing cost, scale, and market access in infrastructure decisions.
The Senate is expected to continue scrutinising the government’s energy strategy, particularly as Kenya moves closer to commercial oil production and seeks to position itself within the regional petroleum value chain.
