Kenyan Oilfield Development Rolls to the Back Burner - Africa’s premier report on the oil, gas and energy landscape.

Kenyan Oilfield Development Rolls to the Back Burner

There is no hurry to get Kenyan oilfield development to financial close, let alone construction stage, even by mid-2021
And this is despite the fact that Tullow Oil, TOTAL and Africa Oil Corp. have lifted the Force Majeure that were declared on May 15, 2020 on the project’s workstreams.
Although the emphasis in the media has been on the partners’ “dialogue with the Government of Kenya to determine the best way forward for this strategic project”, which is really about fiscal framework, the reality on ground is that there is very little enthusiasm on the part of the Joint Venture to move forward on a project that will cost more than $3Billion to first oil, including a heated 1,000+km pipeline from the oilfields in the north of the country to the coast and which is unlikely to deliver more than 80,000Barrels of Oil Per Day at peak.
TOTAL and Africa Oil Corp, the two other partners in the Lokichar basin development in which Tullow Oil is operator, have not always been as aggressive on the oilfield activities as the Irish independent.
TOTAL is farming down its 25% interest in the development, and does not want to be an operator. Tullow is reducing its stakes and is hoping for an exit. Africa Oil Corp. doesn’t have the technical capability that these two companies have, to take a field into production. The Canadian minnow has largely been a real estate broker in Kenya.
The speed with which Kenyan development will happen post COVID-19 depends on which company/companies purchase/s TOTAL/Tullow equity/ies. Final Investment Decision is unlikely to happen before 2023.


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