Kenya misses target for early oil export as contract ends

Kenya has ended its multi-billion shilling early oil export scheme after barely trucking half the targeted volume to Mombasa amidst increasing uncertainties on the prospects for the Turkana oil project.

The second phase of the Early Oil Pilot Scheme had targeted trucking some 500,000 barrels of crude to Mombasa for export but had only gathered 180,000 barrels by the time the contract ended on Tuesday.

The first phase that saw some 250,000 barrels exported at Sh1.48 billion had emboldened the government to increase production and trucking for a second shipment this year.

The second phase was then bogged by bad roads in Turkana that were made impassable by flooding in March, freezing the scheme for months as time lapsed to the June 2 deadline.

Tullow Oil on Tuesday announced the end of the pilot scheme, saying it had served its purpose.

The British oil explorer’s chief operating officer, Mark MacFarlane, said the critical data and market testing for the Kenyan crude had been achieved together with upgrade of local infrastructure.

“The EOPS has provided important lessons for the planning and execution of the Full Field Development phase of the project Oil Kenya. By producing, transporting, storing and exporting crude oil from nothern Kenya, the pilot scheme has provided proof of concept for oil production in Kenya. The first export of crude oil from East Africa in 2019 was a historic achievement and clearly demonstrated the potential of project oil Kenya on world Markets,” Mr MacFarlane said.

The government had planned to ramp up trucking of crude from April 2019 with trucks having been increased to 100 from 30 before floods cut off the road between Kitale and Lokichar early this year .

Tullow Kenya Managing Director Martin Mbogo in March 2019 had signalled a possible extension of the trucking of crude, which started in June 2018 ‘depending on project needs’.