Kenya has yet to finalize agreements with Tullow Oil on four critical issues, delaying the British company's plans to resume drilling in Turkana. These unresolved matters, including land access, water supply, infrastructure, and regulatory approvals, are essential for securing the Final Investment Decision (FID) needed to commercialize the oilfields.
The delays come as the April deadline for resolving these challenges passed without resolution. Tullow Oil Kenya's Martin Mbogo emphasized that concluding these issues is crucial for the FID, which was originally targeted for late 2019. However, extended negotiations with the Kenyan government have stalled progress.
The firm has temporarily halted its early oil pilot scheme (EOPS) to secure necessary regulatory approvals for crude production via the early production facility (EPF). Mbogo noted that approvals are expected soon, allowing EOPS to resume by late April or early May with production increasing from 600 to 2,000 barrels per day.
Tullow has transported approximately 80,000 barrels of oil to Mombasa under the EOPS program. The company plans to store crude at Kenya Petroleum Refineries Limited (KPRL) facilities until 250,000 barrels are accumulated for export, with initial shipments projected for the third quarter of 2019.
The Kenyan Petroleum Ministry has engaged foreign oil experts to assist in negotiations. Tullow and the government continue discussions on the head of terms agreement, a foundational step before finalizing project details. Mbogo declined to disclose specific figures from the suspended trucking operations, citing commercial sensitivity.
