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British explorer Tullow Oil has put development of Kenya’s crude discoveries on the fast track, encouraged by the government’s support for its work.
Tullow’s chief operating officer told theWall Street Journal on Wednesday that the development of Kenya’s South Lockichar basin which was discovered in 2012 is moving at a faster pace than Uganda oil finds — which were discovered five years earlier.
Kenya “will be easier to develop and the government is very enthusiastic for us to get under way with that development and get first oil as soon as possible.
‘‘So as we look at the phasing of our investments there’s a lot of priority being given to Kenya. If it continues to be very material and grow then we may look to modify our holdings in Uganda,” Paul McDade told WSJ in a telephone interview.
Appraisal of the Kenyan discoveries is expected by next year or 2016, with first oil expected around three years later.
Tullow Oil says in its annual report for 2013 that it supports the idea of putting up a pipeline in the next two years if more discoveries are made.
“The current ambition of the Government of Kenya and the joint venture partnership is to reach project sanction for development, including an export pipeline, in 2015/2016. If further exploration success opens additional basins there will be scope for the development to be expanded,” says the Tullow annual report.
Tullow, which is listed on the London Stock Exchange, said that the government’s interest in developing a pipeline increased after drilling of wells in 2013 showed that there could be as much as one billion barrels of oil in northern Kenya.
More appraisal wells and soil testing will have to be done to both confirm how much oil there is and how much of it is actually commercially viable.
The explorer has already said that it is planning to drill 40 wells in Kenya over the last next two years.
Kenya is among four countries where $1 billion (Sh86) billion will be used for exploration in 2014.
The Energy ministry said that it is planning to invite international bids for the design and construction of a crude oil pipeline linking the oil fields in Turkana, where most successful finds have been found, and the Port of Lamu.
Toyota’s construction subsidiary, Toyota Tsusho Corporation, is among international firms that have shown interest in the project.
– Business Daily