The Government of Kenya recently signed a deal with oil and gas majors Total, Tullow Oil and Africa Oil for the development of a crude oil processing facility for oil discovered in northwest Kenya, according to several media reports.
The joint venture partners have signed for the development of the oil fields in the South Lokichar. According to media reports, the deal is very significant to Kenya’s first oil project, and Tullow expects full-scale oil production in 2022.
The Petroleum and Mining Ministry tweeted that the crude oil processing facility is estimated to have a capacity of 60,000-80,000 barrels per day.
Tullow Kenya said in a statement “The infrastructure installed for the Foundation Stage will be utilised for the development of the remaining oil fields and future oil discoveries in the region, allowing the incremental development of these fields to be completed at a lower unit cost.”
The partnership between the joint venture partners and the Government of Kenya is a step forward in the development project. Keith Hill, President and CEO of Africa Oil, commented, “We are very pleased with the signing of the Heads of Terms agreements as it marks an exciting step forward for the project. The conclusion of the negotiations around key fiscal and commercial principles is an important and major milestone towards a Final Investment Decision, providing a solid development framework and confidence to all parties that the project is robust at low oil prices.”
The ministry on Twitter also added that the Heads of Terms were for discoveries in Blocks 10 BB and 13T in South Lokichar Basin.
In February, the government of Kenya said that the discovered crude oil deposits in the country were not enough to justify a refinery construction in the country.