Oil and gas producer, Tullow Oil’s contract for the Early Oil Pilot Scheme in Kenya has expired after being active for two years.
In 2012, the London-listed company discovered a commercially viable deposit in the South Lokichar Basin in Turkana and estimated the field to have at least 560 million barrels of oil.
In a statement by the company alongside its joint venture partners, Total and Africa Oil, it said that it had served its purpose as a pilot project. According to Tullow, the expiry of the contract is the first step of full field development, FFFD, which is the standard practice for onshore oil field development.
The Chief Operating Officer of the company, Mark MacFarlane, said that the project provided important technical data, logistical and operational experience, and training that would assist the National and County Governments, and the Joint Venture Partners on the journey towards FFD.
“The pilot scheme has allowed Kenya’s oil to be marketed and established on world markets. EOPS has given local entrepreneurs an opportunity to participate in crude oil transportation with key focus on industry-safe practices,” he said.
He added that vital local infrastructure had been significantly improved as part of Extended Opportunity Programmes and Services. The maiden shipment of Kenya’s first-ever batch of exported crude oil was purchased by Chinese trading company ChemChina for export to Malaysia in August 2019.
“By producing, transporting, storing and exporting crude oil from Northern Kenya, the pilot scheme has provided proof of concept for oil production in Kenya. The first export of crude oil from East Africa in 2019 was a historic achievement and clearly demonstrated the potential of Project Oil Kenya on world markets.”
However, the project has faced various challenges since then. In January 2020, Tullow hinted at reducing its stake in oil development in a deal that could see it exit completely and jeopardize the future of the project. A local company also criticized the project, saying that it had no new idea and most of its information was already known.
