The Ministry of Energy and Petroleum has officially approved the Field Development Plan (FDP) for the South Lokichar basin, in the latest major breakthrough in the country’s long-delayed oil ambitions.
- •The plan, submitted by Gulf Energy E&P BV, outlines a two-phase development of Blocks T6 and T7, with production expected to ramp up to 50,000 barrels per day.
- •The approved development envisions (wildly optimistic) first oil by December 2026, with full production capacity achieved by 2032.
- •Recoverable reserves are estimated at 326 million stock-tank barrels and the projected capital investment stands at US$6.1 billion under the 25-year contract.
Gulf Energy’s role as the operator is part of a sweeping transition in ownership that followed Tullow Oil’s exit. In a recent deal, Tullow sold its entire Kenyan upstream business to Auron Energy E&P, an affiliate of Gulf Energy Ltd.
The transaction, valued at US$120 million, transferred full operational control to Gulf, while Tullow retained royalty rights and a no-cost option to re-enter during later development phases.
To manage the development, the Ministry of Energy established a significant working committee convening experts across technical, commercial, and legal domains. This body will help negotiate key agreements with stakeholders, facilitate regulatory approvals, and chart a roadmap toward Kenya’s first sustained crude-export program.
The plan places emphasis on maximizing local content, ensuring that procurement and employment benefits accrue to Kenyan communities, especially in the Turkana region, where the oil discovery holds potential to spur regional economic transformation.
Budgeting for infrastructure includes not only upstream extraction facilities but also the logistics needed to evacuate crude. The government’s financial framework anticipates cost recovery over the full 25-year contract, balancing national interests with investor returns.
Kenya’s resolve to convert its petroleum potential into export earnings now hinges on Gulf Energy’s ability to deliver on its ambitious timeline targets and manage infrastructure risks. If successful, the South Lokichar project could reshape Kenya’s energy landscape, positioning the country on a path toward becoming a modest yet meaningful oil exporter.
