The Kenya oil development plan is still on track for the final investment decision (FID) in late 2019 according to Tullow Oil’s June 2018 Trading Statement and Operational Update report.
Tullow Oil chief executive Paul McDade says:
“Tullow has performed strongly so far in 2018. With substantially reduced gearing and financial discipline embedded across the Group, we are we continue to make good progress in sanctioning our developments in East Africa and, having refreshed the exploration portfolio, we are about to embark on a multiyear frontier drilling campaign targeting high impact prospects in Africa and South America.”
The report states that the Front End Engineering Design (FEED) and Environmental and Social Impact Assessment (ESIA) for the upstream Foundation Stage are currently ongoing after Engineering Services Company WorleyParsons was awarded upstream FEED and integrated project management contract in May 2018.
In addition, Tullow Oil states that FEED and ESIA work for the pipeline is going on according to plan and commercial discussions are ongoing with potential pipeline contractors.
The report states: “Extended injection and production testing continues, with water injection testing ongoing at Ngamia-11 and continued oil production from the Ngamia-8 well. The Ngamia-3 well also successfully started production in June 2018. Results from the wells to date are in line with expectations and data will be used to inform the development plan for the Foundation Stage of the South Lokichar Development.”
The Early Pilot Scheme
Kenya began transporting crude oil by road from Lokichar to Mombasa from June 3, 2018, while the first truck arrived in Mombasa on 7 June.
The trucks are carrying 600 barrels of oil per day and the amount is expected to increase to 2,000 barrels of oil per day when the Early Oil Production System is completely operational and production testing at the Amosing production facility kicks off.
Although the plans regarding oil are progressing as expected, the residents of Turkana County are unhappy with the oil sharing deal, jobs, insecurity, and tenders. The residents demonstrated their disapproval late last month by blocking oil trucks at Kalemngorock Center along the Lokichar-Kitale road. The trucks were transporting oil from Ngamia 8 to Mombasa.