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Kenya gears up for first oil export in June

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Kenya is poised to export oil for the first time in its history by June this year. Over 60,000 barrels of crude oil have been stored in tanks in Lokichar, Turkana County, ready for transport to Mombasa Kenya Pipeline Refineries Limited for export.

Principal Secretary for Petroleum Andrew Kamau explained that the early entry into the global market is expected to fetch Ksh421 billion annually before factoring in the cost of production, transportation and profit margins. An estimated 1.5 billon US dollars has been invested in this venture to date. Oil exploration in Turkana is undertaken by three major joint venture partners – Tullow Oil, Africa Oil Corp and MAERSK Oil.

The PS told the media during a tour of the oil fields in Turkana that Kenya has undertaken extensive policy, legal and institutional reforms to align the oil and gas sector with the Constitution while establishing structures to manage the sector in a transparent manner.

Some of legal instruments developed include Petroleum Bill 2015, the Community Land Bill 2015, and the Energy Bill 2015. According to Mr Kamau, these Bills will ensure protection of the environment, participation of the local community and provide a framework for managing the fiscal opportunities and risks of oil revenues once commercial production begins under the Full Field Development.

 

The first oil was discovered at Ngamia 1 in Turkana County in March 2012. Since then, exploration and appraisal have been done on 30 more wells. Recoverable reserves containing a total of 750 million barrels of crude oil have been discovered in the county. The Country will be exporting a total of 2,000 barrels of crude oil per day to the global market.

“What we are doing at the moment is exploration and appraisal under the Early Oil Pilot Scheme. We don’t intend to make much revenue from this venture, but by this endeavor we will be able to establish Kenya as a crude oil exporter and provide valuable information to the international market about Kenyan’s crude,” said Mr Kamau.

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Mr Kamau said the Early Oil Pilot Scheme was created to, among other things, establish logistical infrastructure such as roads and other key installations, provide important technical well data and enable National and County Governments to gain knowhow in technical experience and capabilities as the Kenya Joint Venture transitions from exploration and appraisal into development and production.

Mr. Kamau said the oil will be transported by road to Kenya Pipeline Refineries Limited in Mombasa where it will be transferred into large storage tank at the refinery for onward export abroad.

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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