Tullow suspends early oil pilot scheme over dilapidated roads

By Steve Umidha

Oil exploration company Tullow Wednesday announced the suspension of Turkana’s early oil pilot scheme (EOPS) owing to dilapidated roads in the area.

“Trucking remains on hold until all roads are repaired to a safe standard. Work continues with Joint Venture Partners and the Government of Kenya to progress the development project,” Tullow said in a statement. The bad state of roads had been caused by heavy rains towards the end of 2019.

Kenya’s crude exports hit major milestone in June 4 2018 as four trucks each carrying 150 barrels of rudimentary oil began a ten-day 1, 107kilometre journey from Turkana to Mombasa in what is still expected to shape this country’s fortunes for life.

The first truck arrived at the Kenya Petroleum Refinery Ltd in Mombasa on June 7 of the same year. Kenya formally started exporting oil to international markets in August last year when President Uhuru flagged off 200,000 barrels from Mombasa.

“We are now looking ahead after what we believe is a successful undertaking that has seen Tullow Oil together with our partners so far invest $2billion on the project. The focus is now on major development,” said an optimistic Chief executive of Tullow Oil Kenya Mr. Paul McDade in a past interview. Canadian firm Africa Oil and French company Total are the joint partners in the deal with the government expected to take stake through state –owned oil firm, National Oil.

His comments, came after President Uhuru Kenyatta flagged off the trucks for the initial crude oil generated in Early Oil Pilot Scheme (EOPS), clearly gestures yet another crucial step the country will have to confront when its crude oil soon hit the international market for ‘sampling’ before it gets the much-anticipated clean-bill of health from potential suitors.

Kenya’s crude oil is categorized as Brent crude, which is classified as light and sweet, meaning it has less sulphur at below 0.5 per cent. Ordinarily such category would fetch higher prices at the international market due to its refined form that produces high-value products — petrol and diesel.

The excitement at the time was evidently felt not only from host communities in Turkana County (Ngamia/Amosing fields) where the precious commodity is being grilled, but also the rest of the country, with the former however, more awoke to the hint that their livelihoods are bound to improve for the better, even if not immediately.

The Amosing and Ngamia fields have an estimated contingent resources of about 560million barrels, with plateau production potentially hitting 100,000 barrels per day.

When Tullow Oil began prospecting for oil over 8 years ago, much was not expected until the announcement of the first discovery, which was quickly followed with the second and bigger ‘catch’ that the country took notice.

Several outstanding challenges had previously rocked petroleum exploration activities in the remote region of Turkana including land access and tedious permits often asked by county and government authorities, frequent project implementation delays caused brought by civil societies agitating for Human Rights and environmental issues and compensation, all of which had threatened the production life circle.

Since then, major advancements have taken place with the 2021 commercial production set deadline fast approaching. Already Tullow Oil has hired UK firm Wood to undertake design works on a pipeline that will ferry the crude oil from Lokichar onshore fields to Lamu port.

The actual construction (of the pipeline) will however, depend on completion of Front End Engineering Design (FEED), Environmental and Social Impact Assessments (ESIA) which is likely to take less than a year. The pipeline – to run 820 km between Lokichar and Lamu on Kenya’s coast – would cost $2.1 billion and should be completed in the first quarter of 2021.

Kenya’s Upstream sector essentially deals with hydrocarbon (Oil and Gas) exploration, both onshore and offshore within the four sedimentary basins in Kenya (Anza, Lamu, Mandera and Tertiary Rift), with a total area of about 490,000 square kilometres.

The Upstream Division also deals with licensing of International Oil Companies (IOC’s), monitoring of exploration activities, development and production, transportation and export of crude products.

It is now hoped that Kenya will effectively manage oil and other natural resources to avoid negative results that have confronted a good number of oil producing countries like Nigeria and South Sudan following new discoveries.