CRUDE OIL

Kenya to start exporting Turkana oil by September - Tullow

In Summary

• Kenya’s crude oil is categorised as Brent crude.

• It has low sulphur content at below 0.5 per cent.

upbeat: Tullow Oil has increased its drilling activities in Northern Kenya after new discoveries
upbeat: Tullow Oil has increased its drilling activities in Northern Kenya after new discoveries

Kenya will export its first barrel of oil from Turkana between July and September , Tullow Oil has confirmed.

According to a statement dispatched to media houses ahead of the group’s annual general meeting held Thursday in London, the firm is expected to increase production to 2000 barrels in anticipation of the first export later this year.

"The Early Oil Pilot Scheme continues to truck 600 barrels to Mombasa where 80,000 barrels of oil are being stored ahead of export expected in the third quarter of 2019," the Tullow Oil statement read.

Kenya’s crude oil is categorised as Brent crude, which is classified as light and sweet, meaning it has low sulphur content at below 0.5 per cent. Ordinarily, this fetches higher prices in the international market due to its refined form that produces high-value products — petrol and diesel.

President Uhuru Kenyatta launched the Early Oil Pilot Scheme (EOPS) last June, setting stage for the country’s commercial production expected to begin in 2021/22.

The UK based oil company said it is committed to making its final investment decision in Kenya before end of the year and that it is finalising the Front End Engineering Design (FEED) studies for the Lokichar- Lamu pipeline project.

"Tullow continues to target a Final Investment Decision (FID) in Kenya by year-end although this remains an ambitious target." 

Environmental social impact assessments are also on track for submission to the National Environmental Management Authority (NEMA) at the end of the second quarter. 

The cost of the pipeline is estimated at Sh110 billion ($1.1 billion), with a further $2.9 billion (Sh290 billion) needed for upstream operations.

Yesterday, the group announced the first dividend payout to shareholders since 2014 on high production especially in western Africa.

"The board will be asking Tullow shareholders to approve the Group’s first dividend payment since 2014. This 2018 final dividend and our new dividend policy, which is expected to deliver at least $100 million per year to shareholders," the AGM statement read.

First quarter 2019 Group oil production averaged 84,600 barrels. This was however below expectations following technical issues in Ghana.