Kenya's Oil Exploration Pilot Project Ends, Paving Way for Full-Field Development

An oil terminus at the port of Mombasa (file photo).

Nairobi — Oil and gas producer Tullow Oil's contract on the Early Oil Pilot Scheme in Kenya has expired after running for a period of two years.

According to the company, the expiry of the contract is the first step of full field development, FFD, which is a standard practice for onshore oil field development.

In a statement, the company, alongside its joint venture partners Total and Africa Oil said the scheme had served its purpose as a pilot project.

The London-listed firm said the scheme provided critical technical data, logistical and operational experience and training.

These, according to the firm's COO Mark MacFarlane, will materially assist the National and County Governments and the Joint Venture Partners on the journey towards Full Field Development.

"The pilot scheme has allowed Kenya's oil to be marketed and established on world markets. EOPS has given local entrepreneurs an opportunity to participate in crude oil transportation with key focus on industry-safe practices," said MacFarlane.

In addition, critical local infrastructure, including local roads and the Kainuk bridge, have been significantly improved as part of EOPS.

"By producing, transporting, storing and exporting crude oil from Northern Kenya, the pilot scheme has provided proof of concept for oil production in Kenya. The first export of crude oil from East Africa in 2019 was a historic achievement and clearly demonstrated the potential of Project Oil Kenya on world markets," he added in the statement.

Kenya exported her first-ever batch of crude oil in August last year.

The maiden shipment was purchased for USD$12 million by Chinese trading company ChemChina for export to Malaysia.

The project has however been marred by problems; In January, the British outfit hinted at reducing its stake in oil development, a deal that could see the company exit completely, leaving the future of the project hanging by a thread.

A local lobby on oil and gas also criticized the project noting that it offered no new knowledge, adding that most information was already out in the public.

In 2012, Tullow discovered the commercially viable deposit in the South Lokichar Basin in Turkana and estimated that the field held at least 560 million barrels of oil.

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