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Tullow, Africa Oil have plans for Kenya

Tuesday, April 29 14:12:17

Irish-owned explorer Tullow Oil and partner Africa Oil aim to submit development plans to the Kenyan government late next year for their oil discovery in the northwest of the country, executives from the firms said today.

Oil discoveries in Uganda and Kenya by Tullow Oil and gas deposits found off Tanzania and Mozambique have turned east Africa into a frontier for hydrocarbon exploration.

In an update in January, Tullow and Africa Oil doubled the estimate of their discoveries in Kenya's South Lokichar basin to 600 million barrels.

Since then Tullow has said the Kenyan government has become more focused on early development of Kenya's first oil discovery and project approval is expected in 2015 or 2016.

Tullow said it plans extensive appraisal drilling and testing this year and next.

"We are expecting to submit our field development plans to the government in the fourth quarter of 2015," Robin Sutherland, Tullow Oil's exploration manager for sub-Saharan Africa, told an oil and gas conference in Nairobi.

Discussions were under way on who will lead the development of a pipeline to transport the crude oil to Lamu on the Kenyan coast, he said.

Kenya's plans for oil production have moved fast since Tullow and Africa Oil's discovery of the South Lokichar basin was announced in March 2012.

In contrast, neighbouring Uganda struck hydrocarbon deposits in the Albertine rift basin in 2006 but commercial production has been delayed due to wrangling with oil firms over Uganda's plans for a refinery and other factors and is not expected until 2016 at the earliest. The oil reserves are estimated at 3.5 billion barrels.

In a speech read on his behalf at the conference, Kenya's Energy and Petroleum Cabinet Secretary Davis Chirchir said the government was in the process of soliciting expressions of interest for the pipeline in three segments.

The three sections will be from Hoima in Uganda, linking to Lokichar, from South Sudan to Lokichar, and from Lokichar to Lamu, he said.

James Phillips, vice president for business development at Africa Oil Corporation, said the discoveries in the Lokichar Basin so far had already met the minimum amount of oil required for commercial development, and they were confident the figures would rise further.

"Commercial threshold resources have been exceeded in the South Lokichar Basin. We know we have exceeded the commercial threshold and that it is going to get higher and higher," he said. (Reuters)