Turkana Oil Reserves Not Enough for Kenya’s Export Plans

Kenya’s commercial oil deposits discovered in 2012 at Lokichar Basin in Turkana county are not enough to warrant the construction of a refinery.

Tullow Oil, the company in charge of the extraction of the fuel, estimates that the basin contains around 560 million barrels, and it claims that by the year 2022, commercial production of the fuel in Kenya will officially kick off.

However, according to an official at the petroleum ministry, Tullow’s production of an average of 80,000 barrels a day is not enough for a refinery to be built.

“It is proven the world over that a refinery would make money only when it has a refining capacity of at least 400,000 barrels a day,” said Andrew Kamau, Principal Secretary at the petroleum and mining ministry.

He questioned how Kenya will make money by only refining 80,000 barrels a day and added that the country could import cheaply from India.

The PS noted that the government’s job in the Turkana oil project is mainly facilitation and infrastructural. This way, Kenya will stand a better chance of exporting oil by 2022.

READ Tullow Oil Set To Invest Ksh.7 Billion in Turkana This Year

Currently, the country is utilizing the Early Oil Pilot Scheme (EOPS), which will soon be followed by the Full Field Development phase, to determine whether it stands a better chance as an exporter in the region.

According to the government, the EOPS was not a commercial project, therefore, Kenya will not be earning any money from it as it is a geological experiment.

The pilot scheme will also provide substantial information for future prospects, exploration, and development.

“This early oil is expected to test Kenyan crude oil in the world market, and its main aim is not revenue sharing,” said the PS during an update of the oil operations held in Nairobi.

It would seem that Kenya’s hopes of joining the club of countries producing and exporting oil are a wild goose chase. Initially, there a crude oil refinery at the port of Mombasa but its operations were stopped in 2013.

The refinery’s plans for a 1.2 billion US-dollar upgrade were brushed aside as experts said the idea wasn’t economically viable. In 2016, the government converted the refinery into a storage facility.

Meanwhile, Tullow is making tremendous strides in an effort to ensure the oil harvest is a success.

Last week, Tullow confirmed that it was awaiting the commercial framework agreements from the state and deals over the acquisition of land acquisition for an 800 km pipeline and oilfield infrastructure in the Q1.

The Turkana oil is a joint venture between Total Kenya, Tullow, and Africa Oil.

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