Oil & Gas Africa: Kenya Plans Oil Export By Mid Next Year

Oil & Gas Africa: Kenya Plans Oil Export By Mid Next Year

Kenya could be exporting 4,000 barrels of oil daily by mid next year, after President Uhuru Kenyatta led the country’s cabinet in approving the oil commercialization plan by the Ministry of Energy, on Thursday last week.

The initial plan targets 2,000 barrels daily as the biggest economy in East Africa seeks to break away from her dependence on agriculture and tourism as the main foreign exchange earners.

The crude oil will be refined at Kenya Petroleum Refinery, which was re-acquired by the government from Essar Energy of France, in June this year at a cost of $5 million.

Rehabilitation of the heating tanks at the refinery have already started.

“The country is now getting ready to full commercial exploitation,” read a statement from the cabinet meeting.

The oil exports will earn Kenya between $82,000-$164 million as the average price for a barrel of oil is about $41 per currently.

During the special meeting, cabinet also approved development of a pipeline from the oil-fields to Lamu Port, the nation’s second port which is currently under construction. The port will be used to transport crude oil from Kenya.

The pipeline will cost about $2.1 billion and will cover at least 855 kilometers. It is scheduled for completion in 2021.

Interested companies will bid for the designing and construction of the pipeline after the government advertises the tenders by the end of October.

The nation’s oil-deposits are located in the North-western region, with the biggest at South Lokichar in Turkana County.

The road network to Mombasa Port will be upgraded to ease transportation of crude oil from these fields.

The Eldoret-Leseru-Lokichar road will be upgraded at a cost of $32 million. Rehabilitation of Kainuk Bridge in Turkana County will be rehabilitated to enable larger and heavier trucks carry crude oil from the Lokichar Basin to Eldoret, Daily Nation reported.

The government conducted the first road tests for oil transport from Lokichar to Port of Mombasa, using two trucks ferried samples from Lokichar, through Eldoret to Mombasa, in late July.

Kenya will start the commercial production, four years after Tullow Oil, a multinational oil and gas exploration company, discovered commercially viable oil deposits in Turkana.

Other partners in the oil exploration venture in the country are Maersk Oil of Denmark and Africa Oil Corp of Canada.

The East African nation will join neighboring Uganda as the second nation in the region that plans to start exporting oil 2017.