Oil and gas exploration company Tullow Oil on Monday, December 7 confirmed having received an extension of its exploration licenses in Kenya.
The extended licenses will be valid until the end of 2021.
The licenses for Blocks 10BB and 13T will allow Tullow and its partners to re-assess the project dubbed ‘Project Oil Kenya’, as it aims to come up with a field development plan.
Tullow Oil Chief Executive Rahul Dir welcomed the news, stating that it would give fresh impetus to the creation of a project that would work at low oil prices while maintaining its phased development concept.
“I would like to thank the Government of Kenya for granting this extension which the joint venture partners will use to fully re-assess the development concept for this important project,” he noted.
In coming months, Tullow is expected to work closely with the government on land and water agreements in addition to seeking various regulatory approvals and finalizing the commercial framework for the project.
The government had threatened to withdraw Tullow’s license if it did not submit a work programme by October 31.
The work programme is expected to result in a comprehensive field development plan (FDP) by the first quarter of 2022 and final investment decision (FID) by end of 2022.
The government also expected Tullow to provide a budgetary breakdown of how, along with its joint venture partners Africa Oil and Total, the company would mobilize financing for the project.
Tullow discovered at least 1 billion barrels of crude in the South Lokichar Basin in 2012. Africa Oil Corporation and Total each own 25 per cent in the project.
It is estimated that Kenya needs $3 billion (Ksh334.2 billion) to finance the development of its Turkana petroleum deposits.
An estimated $1.8 billion (Ksh200 billion) is required for upstream projects and $1.2 billion (Ksh133.6 billion) for the Lokichar-Lamu crude oil pipeline
Kenya plans on starting commercial production of crude by 2024.