Tullow earned Sh498m from early oil exportsFriday February 03 2023
British oil explorer Tullow made Sh498.5 million ($4 million) from the sale of Kenyan oil in the two years when the firm made pilot exports to test the market appeal of the commodity.
The disclosures for the Early Oil Pilot Scheme (EOPS) are contained in a financial update for a project that was also meant to give the government technical expertise on the logistics of shipping out the black gold.
Tullow, jointly with Total and Africa Oil started the shipments on June 3, 2018, and lifted 240,000 barrels of Kenya crude in two years before the scheme was ended.
Read: Tullow's Turkana oil production timelines slip once again
“In Kenya, proceeds from Early Oil Pilot Scheme (EOPS) cargo sales have been recorded as a credit against capex, resulting in a net inflow of $4 million (Sh498.5 million)," the firm said last week.
EOPS involved developing five existing wells in the Amosing and Ngamia fields located in Blocks 13T and 10BB and saw the transportation of 2000 barrels per day by road from Turkana to Mombasa.
Kenyan crude oil— said to be appealing to the market because it contained less Sulphur (below 0.5 per cent) — was shipped to India and China.
Tullow added that it plans to inject Sh1.2 billion ($10 million) this year into the project at a time the company is set to finalise the field development plan (FDP).
The British oil explorer owns a 50 per cent operated interest in blocks 10BB and 13T in the South Lokichar basin in Turkana while the Toronto-listed Africa Oil Corporation and French oil major Total each own a 25 per cent stake.
Tullow earlier planned to sell a significant chunk of its 50 per cent stake in the blocks, having run into financial hurdles of its own while Total aimed to sell up to half of its 25 per cent stake.
Read: Tullow ties Turkana oil prospects to stake sale
Kenya’s prospects of tapping the oil billions have been deferred amid delays by Tullow to complete the FDP and tap a strategic investor for the country’s only oil project.
Tullow has yet to develop the field for commercial production more than 10 years after it first struck the oil, attributing the delay to factors such as unfavourable global oil prices since 2014, and approval delays for land and water rights.
Tullow and its partners have already sought an extension of the field development plan (FDP) review period beyond the current financial year.
The British oil firm and its partners had initially planned to reach a final investment decision in 2019 and production of the first oil between 2021 and last year.