Kenya: Tullow to Keep Early Oil Exports on Hold

(file photo).
15 January 2020

British oil explorer Tullow says transport of crude oil from Turkana to Mombasa will remain suspended until further notice.

The firm had halted trucking of crude late last year after sections of the road were badly damaged by heavy rains.

In Kenya, the early oil pilot scheme (EOPS) is suspended due to severe damage to roads caused by adverse weather in the fourth quarter of 2019. Trucking remains on hold until all roads are repaired to a safe standard," Tullow said in a trading update posted on Wednesday.

Turkana County was among the most severely affected regions by recent floods, according to the Kenya Red Cross.

"Work continues with Joint Venture Partners and the Government of Kenya to progress the development project."

Tullow uses about 100 specialised tankers to move 2,000 barrels per day over 1,000 kilometres.

The extended suspension means the government is unlikely to meet its shipment target of of 500,000 barrels of oil.

Crude oil transportation by road was launched by President Uhuru Kenyatta in June 2018.

Later the same year, crude transport was halted temporarily following protests by communities in Turkana.

They were demanding more security in the bandit-prone region which was later resolved.

Despite the latest hurdle which comes at a time that Tullow is facing financial challenges, the company's executive chair Dorothy Thompson expressed optimism of improved performance.

"The Board and senior management are confident of the long-term potential of the portfolio and see meaningful opportunities to improve operational performance, reduce our cost base, deliver sustainable free cash flow and reduce our debt," she said in a statement.

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