Kenya plans to export 500,000 barrels of crude oil in its second consignment set for February 2020. The second shipping expects to fetch a better price, owing to a larger load. Kenya exported its first consignment of 200,000 barrels in August, raking $ 12 million from ChemChina.
Speaking at a media update, the strategic advisor to the Ministry of Petroleum explained that the Government is upping volumes to enjoy economies of scale.
“We want to sell crude oil in bigger consignments in future to achieve better prices at the international oil markets,” Said Brian Muriuki. “We would anticipate better pricing from a larger load. With a larger vessel, we expect to get closer to Brent parity in terms of pricing.”
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Additionally, the February exports are twice as large as the first consignment under the Early Oil Pilot Scheme Oil (EOPS). The better volumes and low sulphur content promise a higher price, boosting investor confidence towards commercial exploration.
Commercial oil exploration is expected to yield approximately 560 million barrels through Tullow Oil, Africa Oil, Total, and the Government.
“Good performance of Kenya’s oil in the international market will also give confidence to the oil exploring firms to scale up investment to achieve commercial production,” Muriuki added.
Pending Land Issues.
While Kenya is making good progress, it faces a few land issues regarding the proposed 821 km pipeline. Muriuki believes that the partners will have solved the land issues before the Final Investment Decision. The investment decision will come out later next year.
