Kenya oil export set to miss target again

Crude oil
Export of the first crude oil from Kenya could be delayed owing to logistical challenges and late issuance of regulatory approvals for the production and trucking of the commodity by road.

Government and Tullow Oil had expected to start exporting crude under the Early Oil Pilot Scheme (EOPS) by June this year but that appears unlikely with the company only having trucked about half of the amount that will be needed for the first shipment.

Ministry of Petroleum said about 88,000 barrels of oil had so far been trucked to Mombasa and was targeting to accumulate 200,000 barrels that would form the first export cargo.

The oil that has been ferried to Mombasa was produced in 2015 during an extended well testing exercise.

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By end of March, Tullow had shipped all the oil stored in Lokichar and has been setting up an Early Production Facility, which will produce 2,000 barrels a day.

This oil will also be moved by road to Mombasa for stockpiling before it is exported.

Head of Petroleum Directorate at the Petroleum ministry, James Ng’ang’a, said the pilot production will start next week and trucking shortly after that.

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“The equipment (production facility) has been set up to produce oil from Amosing and Ngamia wells. Tullow has been testing the machines and the operations will start next week,” he said at a briefing on the East African Petroleum Conference that takes place in Mombasa next week.

“From then, the company will increase the oil being trucked to Mombasa from between 400 and 600 barrels a day to 2,000 barrels a day.”

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The government is optimistic that the first cargo will be shipped out by end of June or early July.

Ng’ang’a said the process of acquiring permits from the National Environment Management Authority, Energy and Petroleum Regulatory Authority (previously Energy Regulatory Commission) had slowed down the operations.

“We have 88,027 barrels of oil stored at (Mombasa) facilities and we want to up this amount to 200,000. Maybe by end of June or start of July, we expect to achieve that,” he said.

At 2,000 barrels a day, Tullow would need over two months to move more than 110,000 barrels needed to make up the required export volume.

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