British oil explorer Tullow Oil has set 2024 as the earliest date Kenya can expect to start reaping gains from the Turkana oil. FILE PHOTO | NMG British oil explorer Tullow Oil has set 2024 as the earliest date Kenya can expect to start reaping gains from the Turkana oil.
Tuesday’s announcement has dampened hopes for an economic boost that was expected to start in 2022.
The petroleum firm said it will take at least four years to reach the commercial production stage when Kenya is expected to start earning about Sh150 billion from crude oil exports every year.
Kenya is yet to sign with Tullow Oil and its partners the critical Final Investment Decision (FID), without which financiers cannot commit to fund drilling, pipeline and other infrastructure projects required to exploit the oil.
Tullow Oil Kenya managing director Martin Mbogo said the firm will continue with its non-commercial Early Oil Pilot Scheme in the meantime to gather market and production data ahead of the large-scale production.
"We are going to make the Final Investment Decision next year and then we will take 36 months to complete the construction works before we start venturing into commercial production. Kenya will have added a new revenue earner bigger than even those it gets from tea exports," said Mr Mbogo.
At present, tourism is Kenya’s biggest revenue earner, grossing about Sh157 billion last year. Tea exports were valued at an estimated Sh138 billion while horticulture raked in about Sh124 billion.
Tullow had earlier announced that it would give the final go-ahead by the end of 2019 for full field development at the Turkana oilfields, with a pipeline and other export infrastructure expected to be ready by 2022.
In June, the oil exploration firm signed the Head of Terms agreement with the Kenyan government, a precursor to the Final Investment Decision agreement.
Mr Mbogo said the current early oil exports are expected to give a better assessment for Kenya’s oil, whose production is expected to hit 70,000 to 100,000 barrels per day after full field development.
The current market testing plan involves the production of 2,000 barrels per day and trucking it to Mombasa for onward shipment. The trucking, which started in July 2018 is expected to continue for two years with the fleet of 100 trucks delivering the waxy crude in insulated containers after heating in Lokichar.The first 200,000 barrels will leave for China in about one week after Kenya sold its […]