Total to Support Kenya’s Lokichar – Lamu Oil Pipeline

French oil firm Total SA has confirmed its commitment to the Lokichar to Lamu oil pipeline as the only evacuation route for Kenya’s crude from the Lokichar fields.

As a result of Total’s commitment,  the government has agreed to a proposal for the French oil major to buy “The issued and to-be-issued share capital of Maersk Oil Exploration International (Mogas Kenya) in respect of Blocks 10BA, 10BB and 13T”.

According to Manoah Esipisu, the State House Spokesperson, this followed a meeting between President Uhuru Kenyatta and Momar Nguer, a member of Total’s executive committee and its head of marketing and services.

“Kenya is optimistic that the entry of Total into the Kenya Joint Venture will strengthen the financial resources and technical competence to the Joint Venture and this will go a long way in accelerating the development of the resources in these Blocks,” said Espisu in a statement.

Reuters Africa reported that a spokeswoman for Total said the company will gain access to oil reserves in Kenya after it acquires the Maersk Oil assets.

“Total respects the commitments made by Maersk Oil. Kenyan oil will be shipped via a pipeline in Kenya with the agreement of the government.”

Read: Tullow Oil to Spend Ksh 170Mn in Kenya’s Oil Exploration in 2018 

Kenya signed joint venture with Tullow Oil, Africa Oil and A.P. Moller-Maersk for a feasibility study for the proposed 820 km Lokichar-Lamu Crude Oil Pipeline to Lamu.

The pipeline would cost $2.1 billion and should be completed in the first quarter of 2021. 

Last year, Total announced the acquisition of 100 percent of Maersk at a price of Ksh 769 billion aimed at strengthening its operations in the North Sea and boost its earnings and cash flow.

Under the agreed terms, Maersk will receive a consideration of $4.95 billion in Total shares and Total will assume $2.5 billion of Maersk Oil’s debt.

The transaction is expected to close in first quarter 2018.