Gulf Energy secures oil rig ahead of Lokichar project kick-off

Police officers escort tanktainers loaded with crude oil from the Ngamia 8 Oil Well in Nakukulas, Turkana County. [File, Standard]

Gulf Energy, the firm that last year took over the Turkana oil project, says it has leased an oil rig from a Middle Eastern firm that will be used to drill oil wells in Lokichar.

This is as the firm looks to start commercial oil production by the end of this year.

Gulf said yesterday it has secured the GW70 rig, valued at more than $15 million (Sh2.94 billion), from Great Wall Drilling Company (GWDC) in the United Arab Emirates (UAE) on a long-term lease arrangement.

It added that it is finalising logistical arrangements to ship the rig from Abu Dhabi to Mombasa. The rig is expected in Kenya by June.

Gulf Energy Chairman Francis Njogu said the firm has reached a contractual arrangement with GWDC to deliver, commission and operate the rig in the South Lokichar Basin under a performance-based model that will also involve skills transfer.

"At Gulf Energy, it's all systems go in the journey to deliver first oil by December 1 this year. The delegation in Abu Dhabi has witnessed firsthand the advanced state of GW70, an integrated onshore oil field drilling rig which we recently secured," Njogu said.

Even as Gulf Energy awaits the parliamentary ratification of its Field Development Plan (FDP), the firm, he said, had commenced strategic investments, including rig sourcing, ahead of the $6 billion (Sh774 billion) project kick-off.

Njogu said the rig would arrive in Kenya around June and start drilling works in early July. In Abu Dhabi, he said, the rig has been undertaking projects for the Abu Dhabi National Oil Company (ADNOC).

Njogu said securing the rig marks a significant investment for the company, coming at a time when global demand for such equipment remains high, and mobilisation timelines are increasingly stretched. Despite these pressures, Gulf Energy says it expects to secure the required legislative and regulatory approvals and has already allocated the necessary capital for the rig.

Alongside Gulf Energy Executives, the delegation in Abu Dhabi included technical officials from the State Department for Petroleum at the Ministry of Energy and Petroleum, the Energy and Petroleum Regulatory Authority (Epra) and the Turkana County Government.

Kenya stands to gain significant fiscal and economic benefits from the South Lokichar Basin oil fields development, with the Government of Kenya projecting potential earnings between $1.05 billion (at $60 per barrel) and $2.9 billion (at $70 per barrel), which translates into Sh136 billion to Sh371 billion over the life of the project.