In Summary
  • Kenya is yet to agree with Tullow Oil on at least four thorny issues that are expected to clear the way for the British oil company to switch back on its drilling machines in Turkana.
  • These issues are expected to lay the ground for the country to secure the Final Investment Decision (FID) and resume operations that are geared towards commercialisation of its oilfields.
  • The matters remain unresolved even as the April deadline is missed. Tullow says as happens in many big-ticket projects, the firm is looking to expedite the conclusion of commercial principles and access to land both for upstream and midstream development.

Kenya is yet to agree with Tullow Oil on at least four thorny issues that are expected to clear the way for the British oil company to switch back on its drilling machines in Turkana.

These issues are expected to lay the ground for the country to secure the Final Investment Decision (FID) and resume operations that are geared towards commercialisation of its oilfields.

The matters remain unresolved even as the April deadline is missed. Tullow says as happens in many big-ticket projects, the firm is looking to expedite the conclusion of commercial principles and access to land both for upstream and midstream development.

Other points that must be resolved include availability of reliable water for production of oil and provision of physical infrastructure to support the project. These were expected to have been addressed by now so that the firm can continue trucking the crude to Mombasa.

After they are resolved, the firm will move to secure the Final Investment Decision, which was planned to have been done by the end of the year.

“Concluding these issues with the government this quarter is a critical FID enabler,” Tullow Oil Kenya boss Martin Mbogo said in an email interview.

“The Kenya Joint Venture (KJV) and the Government of Kenya continue to work together to achieve Final Investment Decision (FID) by the end of 2019, subject to reaching timely agreements on various project requirements from GoK. However, the project is facing extended negotiations with GoK,” Mbogo added.

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