Kenya is targeting more than Sh150 billion in annual revenues from Turkana oil in the initial years of commercial production, which starts in 2022.
Tullow Oil and Ministry of Petroleum officials are already planning to meet potential buyers of oil produced under the pilot scheme, with the first batch of 200,000 barrels scheduled for export by mid this year.
Revenue of Sh150 billion would see the sector emerge as one of the largest foreign exchange earners for Kenya, alongside tourism and remittances from Kenyans abroad.
The country expects to start exporting 80,000 barrels of oil per day in 2022, which would translate to about to 29.2 million barrels a year.
Tullow Oil computed anticipated revenues using a price of $55 (Sh5,500) per barrel. Currently, Brent Crude is going for $66 (Sh6,600) per barrel.
“We will be pushing 80,000 every day of the week, assuming the price of $50 per barrel – today it is upwards of $60 a barrel – and that number will get to $1.5 billion,” Tullow Oil Kenya Managing Director Martin Mbogo said yesterday in Nairobi during an update on the project.
The revenues are, however, exposed to the volatility of global oil prices. Prices sunk to $28 (Sh2,800) per barrel in January 2016 and eight years earlier were at an all-time high $147 (Sh14,700) in July 2008.
Petroleum Principal Secretary Andrew Kamau said the ministry and Tullow Oil would next week meet potential buyers of oil produced under the Early Oil Pilot Scheme (EOPS).
He said a number of refineries already have samples of the Kenyan crude and are expected to give their feedback next week on the sidelines of an oil meeting in London.
“We have sent a brochure with the specifications of the crude oil out to various companies and next week, we will meet with the companies that feel they can run the Kenya crude,” said Mr Kamau.
“We will sit down with them and find out what kind of price they are prepared to pay, whoever gives us the best price will be the company that we will ship the crude to.”
While Tullow Oil did not disclose the profits it would be making, past projections have shown the breakeven point to be at $34. Mr Mbogo said at $50, investors would get a “decent return on investment”.
The project is expected to cost about $3 billion (Sh300 billion) in a mix of debt and equity.