Plans are underway for Kenya to raise $1 billion of debt to buy a stake in an oil project operated by Tullow Oil Plc and its partners, likely to happen next year.
The debt will be used as an equity injection in Kenya’s oil company to fund its portion of the project, which includes a heated pipeline.
Once complete, the project will include a pipeline to the coast for exports and an estimated output of 120,000 barrels a day, with expected gross oil recovery of 585 million barrels over the full life of the field.
Tullow and its joint venture partners are also seeking strategic investors for the Kenyan project. Bloomberg reports that the national oil company is currently in talks with energy giant Saudi Aramco as well as other firms as it searches for a non-equity strategic partner for its downstream business.
In September this year, Tullow Oil announced plans to invest KSh340 billion more in its crude oil development project in Kenya, as a result of additional wells that are set to be drilled alongside a larger diameter crude oil export pipeline. The company said the additional investment will be used to develop its upstream activities as well as the pipeline between Turkana and Lamu.
Tullow oil entered Kenya in 2010, after signing agreements with Africa Oil and Centric Energy to gain a 50% operated interest in five onshore licences; 10BA, 10BB, 10A, 12A and 13T. In 2012, Tullow farmed into onshore Block 12B with 50% and increased its interest in Block 12A to 65%. Since then our interest in Block 10A was relinquished in December 2013. Tullow currently has a 50% operated interest in Blocks 10BA, 10BB, 13T and 100% in Block 12B. In June 2019 Tullow exited non operated Block 12A.