Kenya revives oil export dream with approval of Lokichar plans

Energy and Petroleum CS Opiyo Wandayi during a media briefing to announce the Government's approval of the South Lokichar Field Development Plan (FDP). [Benard Orwongo, Standard]

Kenya's hope to be an oil export country has been renewed by the government's approval of the South Lokichar Basin Field Development Plan.

Viability of the Sh793 billion ($6.1 billion) project was confirmed by Energy and Petroleum Cabinet Secretary Opiyo Wandayi who exuded confidence that by end of 2026, drilling of the oil would have started.

He said the field development plan has been submitted to Parliament for ratification. This is after the same was submitted to the Energy and Petroleum Regulatory Authority (Epra) by the Gulf Energy E&P BV, the firm behind the exploration.

"Today, I officially signed instruments submitting the field development plan and the respective production sharing contract to Parliament. Under the Petroleum Act, Parliament has a maximum of 60 days to make a determination of those documents," said the CS.

He added: "We are hopeful Parliament will ratify these instruments. It is after the ratification that works will commence on the ground."

The CS noted that this is the first time a field development plan has advanced to the level of ratification, signalling the country's shift from exploration to development and possible commercial production.

"This development will generate benefits felt both nationally and locally. It will increase jobs, open opportunities for local suppliers, stimulate new enterprises and support long term economic activity," he said.

Turkana and West Pokot Counties are expected to benefit with improved infrastructure as the project takes shape.

"Successful execution of this project will signal to the world that Kenya is ready for large scale, high value industrial investments," said the CS. "It is a milestone that moves Kenya closer to unlocking its broader petroleum potential and reinforces our ambition to build a resilient, innovation-driven and opportunity rich economy.

The anticipation is that 326 million stock tank barrels of oil will be mined from the project over a 25-year contract period. This will be done in phases.

Phase one is projected to produce 20,000 barrels of oil per day, rising to 50,000 barrels per day under phase two.

"The contractor targets first oil by December 2026 and full ramp-up by 2032," said the CS.

The plan outlines how the six discoveries within the development area will be developed which will also include further exploration. This will be done starting with the largest and most technically mature reservoirs.

The CS noted that it has been 14 years since exploration started.

"The country cannot afford to wait any longer. The ministry and other stakeholders have been able to get to this point through concerted efforts and deliberate steps," he said.

Gulf Energy, through Auron Energy, bought off Tullow Oil in the Turkana oil exploration project, which was doing the exploration.

The sale was completed in September this year.

"The government has full confidence in Gulf Energy's capacity and commitment to deliver first oil within the agreed timelines and to progress to full field development," said Wandayi.

He added that as the country unlocks the potential of the South Lokichar Basin, the government remains committed to expanding opportunities in other basins.

"Plans are underway to make additional blocks available through licensing rounds and direct negotiations," he said.