Tullow Oil, Maersk to begin drilling wells in December as Kenya eyes fuel exports for 2017

Mining and exploration company, Africa Oil and its partners in Kenya will drill as many as eight wells in December to boost proven resources and improve financing prospects for field development and an export pipeline, an executive said.

The group, which includes Tullow Oil and Maersk, initially planned to build a single pipeline to connect Ugandan oil fields and the Kenyan project to Kenya’s coast, but Uganda opted to build its own pipeline via Tanzania.

The announcement comes at a time when global oil prices have been plaguing the industry.

The International Monetary Fund (IMF) last month urged Kenya to minimize its reliance on oil whether for fiscal purposes or for export as the country gears towards an Early Oil Pilot Scheme (EOPS) project.

In October, Director for the African Department, at the IMF, Abebe Aemro Selassie urged Kenya to maintain the diverse economic structures that the country has.

He said Kenya should learn lessons from oil exporting countries in the continent and maintain diverse economic structures.

“I think the number one thing that you keep hearing from countries in West Africa [and] other oil exporters right now, is the importance of maintaining a diversified economy, Those countries are emphasising that they wish they had much less reliance on oil exports,” he explains.

Oil dependent countries have registered slowed growth following a recent drop in oil prices.

Africa Oil Chief Executive Keith Hill said in an earlier statement that building a standalone pipeline for Kenya makes the firm much more dependent on its own resources for justifying and financing that pipeline, encouraging further drilling to firm up oil discoveries.

The South Lokichar Basin in north Kenya is now estimated to have 766 million barrels of recoverable contingent oil resources.

The latest drilling programme will begin with two exploration wells. The first well will be in early December, followed by others, whose imolementation will be based on the success of the preceding wells.

The exploration firms seek to secure a final investment decision for the Kenyan project by late 2018, with full production expected to start about three years later.

The country plans to start small-scale oil production in 2017.

 

 

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