Kenya is set to drill more than 200 oil production wells that will supply up to 80,000 barrels of crude oil each day as the government targets early petrodollars.
Tullow Oil and its partners Total and Canada’s Africa Oil Corp have together sunk 40 oil wells in Turkana since 2012. In that period, they have reached more than 700 million barrels of crude oil in recoverable reserves which can be used for commercial purposes. Therefore, the extra 200 wells will further increase the yield.
Proposed Legislation and Increasing Drilling Facilities
Treasury Cabinet Secretary Henry Rotich said the Ministry has created a draft law that proposes to guide the establishment of a fund that will hold the extra proceeds from oil for future use and to prevent misuse.
“We have already completed the Sovereign Wealth Fund legislation, which will help us deal with the potential windfall of resources from the extractive sector and will also help us manage the resource responsibly for the current and future generations,” said CS Rotich adding that the works to increase drilling facilities were underway.
“We are working with our private sector partners to develop the necessary infrastructure to evacuate and achieve early monetisation of our crude oil resources,” he added.
Currently, the early pilot scheme (EOPS) has already begun, with nearly 2,000 barrels of crude oil being transported by road to the port of Mombasa each day. The transportation will go on for almost two years ahead of the pipeline construction which will stretch 821 kilometres from Turkana to the Lamu port.
“As this is a commercially viable project, we plan to deliver it on a project finance basis without recourse to public debt,” said Mr Rotich. “The government will, however, invest as a shareholder in the integrated project and will provide public sector facilitation as necessary.”
The resource is expected to diversify Kenya’s exports, reduce the price of importing machinery and cars, and increase hard currency inflows.
