Gulf Energy E&P BV has leased a KSh 1.94 billion ($15 million) onshore drilling rig in Abu Dhabi, UAE as it prepares to kick off production from the South Lokichar Basin later this year.
- •The GW70 rig from the Great Wall Drilling Company (GWDC), previously deployed on Abu Dhabi National Oil Company projects, is expected to arrive in Mombasa by late March, with commissioning planned for June and first drilling scheduled in July.
- •The move comes as Gulf Energy awaits parliamentary ratification of its Field Development Plan for Blocks T6 and T7, which outlines a phased rollout targeting initial output in December 2026 and a long-term production to 50,000 barrels per day.
- •Recoverable reserves across the basin are estimated at 326 million barrels, with total investment projected at US$6.1 billion over the 25-year contract period.
“At Gulf Energy, it’s all systems go, in the journey to deliver first oil by December 1st this year. The delegation in Abu Dhabi has witnessed firsthand the advanced state of GW70, an integrated onshore oil field drilling rig which we recently secured,” said Gulf Energy Chairman, Francis Njogu.
A government delegation, including representatives from the State Department for Petroleum, the Energy and Petroleum Regulatory Authority (EPRA), and Turkana County officials, recently conducted a technical inspection of the rig in Abu Dhabi, evaluating its operational safety, performance readiness, and skills transfer commitments.
“During the inspection, the team carried out a detailed technical evaluation of the rig’s operational systems and safety mechanisms. Recommendations were issued to fine-tune readiness and guarantee seamless performance once the rig is mobilised to Turkana,” said a communique from Turkana County Government officials.
The South Lokichar project operates under a revised production-sharing contract that grants Gulf Energy and its contractors exemptions from value-added tax on petroleum-related goods and services, import declaration fees, railway development levies, and withholding taxes on relevant services and interest. The updated terms also allow the company to recover up to 85% of annual crude output as cost oil, up from 65%, accelerating recoupment of exploration and production costs.
The government stands to gain significant revenue from the basin, with projected earnings of US$1.05 billion to US$2.9 billion at oil prices of US$60–70 per barrel. Profit-sharing arrangements provide for a minimum 20% government entitlement, climbing to 75% at peak production, with windfall taxes applied on oil above US$50 per barrel.
Gulf Energy holds full operating interest in Block T7 and has acquired the upstream assets previously held by Tullow Kenya in a US$120 million transaction completed in October last year.
