Nairobi, Kenya: Kenya will start exporting crude oil in December and an early pilot scheme is due to start next week, Andrew Kamau, Principal Secretary in the Ministry of Petroleum, told journalists on Wednesday.
2,000 barrels of oil will be transported daily via insulated tanktainers from the oil fields in the Lokichar Basin in northwest Kenya to the port of Mombasa, East Africa’s largest port.
“Once we have accumulated 400,000 barrels of oil which we estimate will occur in December, we will then sell it to the international oil markets via a tender process,” Kamau said.
Kenya struck oil in 2012 and has so far confirmed approximately 750 million barrels. Kenya is currently undertaking the Early Oil Pilot Scheme (EOPS) before full field oil production commences in 2021.
Kamau said that the EOPS will help Kenya become a crude oil exporter while providing valuable information on the international market for Kenyan crude.
He added that Kenya is currently finalizing commercial agreements with both the upstream and midstream oil firms in order to pave way for commercial sale of crude oil.
Kamau noted that during the pilot scheme stage Kenya is not expected to make any profit from the sale of crude oil.
“However, it (EOPS) is an important step towards full scale commercialization of the oil deposits because it will provide important technical data on the oil well performance over time,” Kamau said.
Kamau said EOPS will also allow national and county governments to gain enabling technical experience and capability as oil sector transitions from exploration and appraisal into development and production.
Kamau noted that current production at the Amosing and Ngamia fields is between 400 to 500 barrels per day and production will be ramped up to 2,000 barrels per day next year.
The PS said that once the crude oil pipeline is built, production will reach between 80,000 to 100,000 barrels per day.
The oil was previously stored at storage tanks next to the oil fields but will from June be evacuated to the port of Mombasa storage facility.
The EOPS is being undertaken by the Kenyan government and the Kenya Joint Venture Partners comprising of Tullow Oil, Africa Oil and Total Oil who own the Blocks 10BB and 13T.
Martin Heya, Secretary of Petroleum at the Ministry of Petroleum, said that Kenya’s oil is likely to sell at a discount as the global oil markets are yet to be familiar with quality of Kenya’s oil.
Heya said that up to June 2012, 32 wells were drilled in four Kenya’s sediment basins but none were discovery oil wells.
“Between 2012 and 2017, oil firms drilled 40 exploration and appraisals wells in the South Lokichar basin and made ten discoveries,” he said.
Heya said Kenya landmass which has potential oil deposits covers approximately 500,000 square kilometers, yet only 23 percent of that has been surveyed.
He said that East Africa is fast becoming a key player in the global oil and gas scene as Kenya, Uganda, Tanzania, Mozambique and South Sudan have already made hydrocarbons discoveries.
The official noted that Kenya is currently undertaking discussions with international pipeline construction firms that have expressed interest in building an oil pipeline from Lokichar oil fields to the Lamu port in the Indian Ocean coast.