Kenya ready to produce oil ‘now’

Kenya could start producing oil earlier than expected, with the company currently exploring oil saying it’s ready to start production “now” if the road network is improved.

This, according to Tullow Oil chief executive officer, Mr Aidan Heavey would make it possible for transportation of crude oil to Mombasa refinery pending construction of a pipeline.

Experts estimate that it will take three to five years to lay the pipeline and related infrastructure to Mombasa allowing pumping of the crude oil.

Scouting for partners

“If local roads were improved, Tullow could start producing from Kenya now, possibly trucking crude to the refinery in Mombasa,” Mr Heavey told Bloomberg at the side line of the company’s annual general meeting held in London Wednesday.

The company is scouting for partners to finance development of the oil fields in readiness for the production.

“It’s too much for any company, even a major company,” Mr Heavey added.

Tullow Oil and its partner Africa Oil are currently exploring oil in northern Kenya and Ethiopia with result for the first well already termed as commercially viable.

The testing of the Twiga South-1 discovery was completed in February 2013 with a flow rate of 2,812 barrels of oil per day (bopd) was achieved, but according to Tullow, it has the potential to be increased to over 5,000 bopd.

A further five tests are planned over the next month and are expected to lead to an increase in the previous total net pay of 100 metres.

“…the Twiga South-1 well test has confirmed good productivity,” read a statement issued ahead of its AGM. The companies plan to drill 10 more wells.

However, it suspended exploration on its Paipai-1 well in March 2013 after encountering light hydrocarbon shows “pending agreement on future evaluation options.”

Drilling efficiency

The company has contracted a “lighter, more mobile rig has been contracted to start work in September 2013 which will increase drilling efficiency by conducting testing operations and drilling shallow prospects and evaluation wells, the oil explorer said.

Mr Heavey further noted that should a few more wells in Kenya prove significantly productive, a pipeline from its wells in Uganda could be built to go through its wells in Turkana for onward transmission to Mombasa for refining. The pipeline will link the refinery in Uganda to the port of Mombasa.

“Critically, agreement has been reached on a basin commercialisation plan which will include an export pipeline and a refinery sized to meet the local market demand,” Tullow further said.
Raised hopes

Kenya has continued to attract interest following Tullow’s announcement in March last year, it had struck oil in the country raising hopes the country could be holding substantial oil resources.

“The next exploration well is Etuko-1, which is expected to spud within the next two weeks. This well is testing the first prospect in the Basin Flank play, and is more centrally located in the basin compared to Ngamia and Twiga South which were drilled along the basin bounding fault,” the statement added.