Kenya: Tullow Oil has contracted Dubai-based Almansoori Petroleum Company to supply an Early Product Facility (EPF) at a cost of $10 million, to help it extract crude in South Lokichar in Kenya’s north, even as uncertainty surrounds the Early Oil Pilot Scheme.
The deal with the Dubai company was signed early this year as part of the wider processes in the run up to early production, which has run into trouble after the government shelved it citing logistical challenges.
But Tullow had already secured the government’s approval to bring the Early Product Facility and have it installed. The Ministry of Energy gave the green light for its procurement.
Tullow Oil says that it has invested $1.5 billion in Kenya since it started exploration activities in 2010, including $213.5 million this year. Of this, $100 million is being spent on preparing the oilfields to start production and exporting of crude oil.
The EPF, which is a temporary equipment and being ordered on a rental basis, will enable Tullow Oil connect all the 40 wells it has dug and thus achieve the targets of extracting 2,000 barrels of crude every day when the EOPS begins.
The oil firm says the equipment is on its way and is expected to be installed in November, after Tullow secures all the necessary approvals from government agencies like the Energy Regulatory Commission, the National Environment Management Authority and the Kenya National Highways Authority.
“We have decided to rent a temporary facility for pumping the crude for transportation to Mombasa before a permanent production facility can be installed to facilitate full-scale production when the pipeline is ready,” said Tullow Oil communications manager Timothy Tororey.
He said that Tullow expects the EOPS to kick off at some point despite, a campaign by some oil marketing executives and civil society groups, who say the scheme is a loss-making venture, especially considering the current crude oil prices averaging $55 per barrel on the international market.