INTERRUPTION

Tullow suspends oil trucking to Mombasa

The British oil explorer has pegged the suspension on severe damage to roads, caused by adverse weather in the fourth quarter of 2019.

In Summary

•The suspension will affect export timeliness where the country has been accumulating crude for export at the defunct Kenya Petroleum Refineries Limited.

•Trucking of crude oil from Turkana to Mombasa by road commenced on June 3, 2018.The first crude oil was exported to international markets in August last year.

Tankers that transported crude oil from Turkana County at the Mombasa Oil Refinery in Changamwe, June 6, 2018.
Tankers that transported crude oil from Turkana County at the Mombasa Oil Refinery in Changamwe, June 6, 2018.
Image: ANDREW KASUKU

Tullow has suspended trucking of crude oil from Turkana to Mombasa, a blow to the Early Oil Pilot Scheme(EOPS) which had gained momentum after first exports last year.

The British oil explorer yesterday said the suspension is due to severe damage to roads, “caused by adverse weather in the fourth quarter of 2019.

“Trucking remains on hold until all roads are repaired to a safe standard,”Tullow said in its trading statement and operational update.

The suspension will affect export timeliness where the country has been accumulating crude for export at the defunct Kenya Petroleum Refineries Limited, which has now been turned into a storage facility.

Trucking of crude oil from Turkana to Mombasa by road commenced on June 3, 2018.

In August last year, the country witnessed the export of its first crude oil to international markets when President Uhuru Kenyatta flagged-off 200,000 barrels of oil at the Kipevu Oil Terminal.

The first consignment fetched $12 million (Sh1.2 billion).

"Work continues with Joint Venture Partners and the Government of Kenya to progress the development project," Tullow affirmed yesterday.

The road dilema adds to a list of challenges the project has faced in recent times.

In late 2018, protests by locals (Turkana residents) halted the trucking process.

The local community was protesting against insecurity in the area, which was among issues the government had promised to address as the EOPS commenced.

The government is counting on earnings from oil exports to help grow the economy.

Tullow and its partner Africa Oil discovered commercial oil reserves in the Lokichar basin in 2012. Total has since taken a 25 per cent stake in the project.

Since last year, the group has been transporting some 2,000 barrels per day by truck to Mombasa to test flow rates and other technical issues.

Plans are underway to construct a heated pipeline from Lokichar to Lamu, where construction of a second sea port is ongoing.

This is ahead of full production and exports set to commence in 2022.

Tullow estimates that Kenya's onshore fields in Turkana hold 560 million barrels of oil and expects them to produce up to 100,000 barrels per day from 2022.