Kenya's oil production goals keep shifting
What you need to know:
President, in his address to executives attending the Germany-Kenya business forum in Berlin, hinted at a distant date of 2022 contrasting earlier projections of September 2016.
In January, the government kept a stronger push to have the first oil off the ground by September this year.
In December 2015, Kenya made clear plans to sell crude oil by September 2016, despite expert advice that the earliest the Turkana oil fields can be commercially exploited is 2020.
Confusion continues to characterise Kenya’s journey towards commercial oil production, as target output dates keep changing.
From December last year, the government has kept changing timelines, with the latest emerging from President Uhuru Kenyatta’s visit to Germany.
The President, in his address to executives attending the Germany-Kenya business forum in Berlin, hinted at a distant date of 2022 contrasting earlier projections of September 2016.
“President Kenyatta said while Kenya would start exporting crude oil by 2022, the country has no intentions of abandoning commercial agriculture and other traditional economic activities,” read a statement from the presidential strategic communication unit.
In January, the government kept a stronger push to have the first oil off the ground by September this year even as a report issued by UK’s Tullow Oil Plc indicated that the company was looking at 2017 to make a final decision on investment in production for both Kenya and Uganda.
Tullow said in its operational update that it submitted the field development plan, a precursor to the final investment decision, to the government in December and that discussions between the two parties were going on.
Analysts had also predicted that oil production could be delayed even further should international crude prices maintain a decline that may put off investors in some of the required infrastructure.
In December 2015, Kenya made clear plans to sell crude oil by September 2016, despite expert advice that the earliest the Turkana oil fields can be commercially exploited is 2020.
A State House-based team was given a month to work on the logistics of the evacuation that would see crude moved by trucks from Lokichar to Kitale, from where it would be taken to Mombasa in specialised rail wagons for storage.
The government placed the September oil commercialisation headache on Energy Cabinet Secretary Charles Keter immediately he assumed office.
Tullow, jointly with Africa Oil Corporation, have discovered 600 million barrels of oil in Turkana, which the government wants moved by road and loaded on rail wagons owned by Rift Valley Railways to the Kenya Petroleum Refineries storage tanks in Mombasa.
From there, the crude oil will move through an existing pipeline, which needs to be reconfigured so that it can pump directly to the jetty at the Kipevu Oil Terminal.
The Turkana explorer has, however, remained non-committal on when Kenya will export oil, despite the suggestion that the country is ready to start the lucrative venture.
In a trading and operational update released in January, Tullow said it had only committed to have a blueprint on the infrastructure needed to export oil but distanced itself from recent reports that Kenya could begin exporting oil by 2017.
The UK explorer said it had submitted a draft field development plan to the ministry of Energy, which will guide the Kenyan and Ugandan governments on how best to extract the oil.
