Kenya Oil & Gas News

Construction Of Crude Oil Early Production Facility Starts in Turkana
Dubai based Almansoori Petroleum Company has started the construction of an early Production Facility (EPF) at Amosing that will help block operator Tullow Oil  start the production of oil in South Lokichar under the Early Oil Pilot Scheme (EOPS) according to Ministry of Petroleum and Mining Principal Secretary Andrew Kamau.

The facility estimated enables the country to begin production planned for Q1 2018 early while full field development is being planned and permanent facilities are being built. Other than bringing projects onstream faster early production systems provide real-time production data for appraising reservoir performance before more-expensive long-term facilities are installed.

In South Lokichar the early oil pilot scheme will start by utilising over 75,000 barrels of oil already in storage at the Ngamia and Amosing sites which were produced during appraisal of the Ngamia and Amosing fields and which is enough to sustain the EOPS for over a month. The Ngamia-11 appraisal well (143 meters of net oil pay) completed in Q4 2017 will also be utilised in a waterflood pilot test planned for the first half of 2018.

Already three firms Prime Fuels, Multiple Hauliers, Oilfield Movers have been contracted to ferry the crude oil by road using insulated containers/tanktainers each having a minimum fluid capacity of 25,000 litres to the Kenya Petroleum Refineries based in Mombasa following the signing of a 3 year lease agreement with Kenya Petroleum Refineries Limited (KPRL) allowing Kenya Pipeline to use the facilities of KPRL for the Early Oil Pilot Scheme Project.

Tullow seeks rapid FID for Kenya oil project
Tullow Oil says it wants to make a final investment decision on the development of reserves in Kenya’s South Lokichar Basin in 2019, as it seeks to take advantage of prevailing low industry costs to keep project expenditure down.

The development has been in limbo for several months, hamstrung by disputes with communities around the oilfields close to Lake Turkana in northern Kenya over revenue sharing and by uncertainty surrounding last year’s disputed Kenyan presidential election.

Tullow says it is targeting the launch of front-end engineering and design in 2018 ahead of FID in 2019, with the hope of producing first oil by 2021, or, more likely, 2022. This first phase of the project will develop reserves in Tullow’s Ngamia and Amosing acreage, estimated at around 210m barrels, using one central processing facility.

Initial output from this “foundation” stage is forecast to be 60,000-80,000 barrels a day, with possible plateau production of more than 100,000 b/d later, as more oil from the surrounding area is fed into the processing facility. Tullow estimates 2C proven and probable resources for the entire acreage at 560m barrels and 3C resources at 1.23bn barrels.

Cost uncertainty
Capital expenditure for the foundation stage is estimated at $2.9bn, comprising $1.8bn for the upstream development and $1.1bn for the pipeline that needs to be built to get the oil to the Kenyan coast for export. Uncertainty over the cost and timetable for building the pipeline, which would run 820km to the northern coastal town of Lamu has dogged the development. Tullow Oil’s Chief Executive McDade said discussions with the Kenyan government over the route were progressing, and that the joint venture group members were aligned both on resource levels and “the way forward”, despite the cost of the pipeline.

Tullow holds a 50% stake in the acreage, alongside partners including Africa Oil and also Total, due to its acquisition of Maersk Oil & Gas. McDade said Tullow would consider reducing its stake in the project once FID had been taken.