This archive report was first published on 30 October 2019.
Published on October 30, 2019, Kenya is set to export 500,000 barrels of crude oil in its second consignment scheduled for February 2020. This move aims to capitalize on economies of scale and potentially fetch a better price at the international oil markets.
The first consignment of 200,000 barrels, exported in August, raked in $12 million from ChemChina. The strategic advisor to the Ministry of Petroleum, Brian Muriuki, explained that the government is seeking to sell crude oil in larger consignments to achieve better prices.
"We want to sell crude oil in bigger consignments in future to achieve better prices at the international oil markets," Muriuki said. "We would anticipate better pricing from a larger load. With a larger vessel, we expect to get closer to Brent parity in terms of pricing."
The February exports are twice as large as the first consignment under the Early Oil Pilot Scheme Oil (EOPS). The better volumes and low sulphur content promise a higher price, boosting investor confidence towards commercial exploration.
Commercial oil exploration is expected to yield approximately 560 million barrels through Tullow Oil, Africa Oil, Total, and the Government. The success of Kenya's oil in the international market is expected to give confidence to the oil exploring firms to scale up investment and achieve commercial production.
However, Kenya faces a few land issues regarding the proposed 821 km pipeline. Muriuki believes that the partners will have solved the land issues before the Final Investment Decision, which is expected to come out later next year.
