Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
Petroleum CS John Munyes after signing the agreement with Mark Macfarlane Exec VP Tullow oil.

Energy

Kenya signs deal to develop more oilfields in South Lokichar basin

Petroleum CS John Munyes after signing the agreement with Mark Macfarlane Exec VP Tullow Oil/PHOTO-Moses Muoki

NAIROBI, Kenya Jun 25 – The Kenyan government has signed Head of Terms for the development of oilfields in the South Lokichar basin; a deal inked with Tullow Oil, Total and Africa Oil who are Joint Venture partners.

The agreements are for the discoveries of oilfields in block 10BB and 13T specifically in the Amosing, Ngamia and Twiga fields. As per the deal, the fields should be developed to the foundation stage with a 60,000-80,000 barrel production per day with a central processing facility and an export pipeline to Lamu.

Speaking during the signing ceremony, Petroleum and Mining Cabinet Secretary John Munyes termed the agreements as being in the interest of Kenya.

“Head of terms define our project by drawing out the resources that will be developed within the agreement, the obligation of each parties and they also define physical incentives such as the development of the crude oil pipeline from Lokichar to Lamu,” Munyes said.

The Ministry has embarked on negotiations to secure land and the water needed for the project and are in consultation with 7 county governments. It is expected that by 2022, the pipeline from Lokichar to Lamu will deliver 60,000-80,000 barrels of oil per day.

The project is estimated to cost US$3 billion and will be the largest single private investment in Kenya.

“What we have signed today with the heads of terms give us the capability to go to our financiers to get the funding we need to allow us to invest in the pipeline and move forward in sanctioning the project. We have the absolute fiscal certainty and we need to make sure that this project will make money for the Government of Kenya and for the international contractors at the current oil price uncertainty and low oil prices globally,” said Tullow Oil’s Executive Vice President Mark Macfarlane.

Currently 2000 barrels are being trucked to the Port of Mombasa per day. So far 150,000 barrels of oil have been delivered and it is estimated that by end of July they will hit the targeted 200,000 barrels of oil required for the first shipment to leave the port.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...