Tullow Oil which found Kenya's first oil is expected to start initial production next year after it found resources in the Lokichar Basin.

Tullow and its partner Africa Oil Corp are set to hold discussions with the government in readiness of pumping the oil which is estimated to be more than 300 million barrels from the combined Twiga, Ngamia, Etuko wells among others.

"The excellent results to date onshore Kenya are an important step towards understanding the overall basin potential and its commerciality," Keith Hill, President and CEO of Africa Oil said.

Exploration drilling and testing activity in the region commenced in January 2012 with the drilling of the Ngamia-1 well followed by the Twiga South-1 well.

In May this year, the partners started drilling on the Etuko prospect which is 14 km east of Twiga South-1.

"We've certainly reached the threshold for development," Tullow Chief Operating Officer Paul McDade said in a phone interview with Bloomberg. "We are starting to think about other options within Kenya to do earlier production by road and by rail."

The partners have made three discoveries in the basin and plan further exploration and appraisal over 12 to 18 months before declaring the project commercial. Tullow plans to export Kenyan oil, which may be joined with volumes from Uganda, South Sudan and possibly Ethiopia, by pipeline when output rises.

"We are likely moving ahead pretty soon" with a pipeline preliminary feasibility study that may bring oil from Uganda and Kenya to the Indian Ocean coast, McDade said. "Very limited volumes" can be brought to Kenya's market as soon as next year and higher volumes as soon 2016 before the pipeline is built."

Once operations at Etuko-1 are complete, the rig will move to the Agete prospect located six kilometers north of the Twiga South discovery.

The planned discussion with government will include consideration of a "start-up phase" for oil production system with potential to deliver significant production rates with oil export via road or rail ahead of construction of a full-scale pipeline.

"Resources discovered to date are of a scale that the partnership will initiate discussions with the Government of Kenya and other relevant stakeholders to consider development options," Hill said in a statement.

"Exploration and appraisal activities to date have significantly de-risked the remaining prospectivity in the Basin and underpin the belief that it and other basins within Africa Oil's acreage could have similar potential to the Lake Albert Rift Basin in Uganda," he said.

Last month Tullow doubled its projection of the available oil in the confirmed wells in Northern Kenya.

The Ngamia 1 and Twiga South 1 wells estimates were increased to a net oil pay to 200 metres and 75 metres respectively.

At an optimised flow rate potential of around 5,000 barrels of oil per day per well, the combined mean associated resources for the two discoveries is now estimated to be more than 250 million barrels with a potential to increase further following appraisal.

Ekales-1 will be the the next exploration well in the region. It is located between the Ngamia and Twiga-South discoveries and drilling commenced on July 22.

Africa Oil's acreage includes several tertiary-aged rift basins that have similar characteristics to the Lake Albert Rift Basin in Uganda. Over 90 leads and prospects have so far been identified across this acreage in Kenya .