- Commercial exports are expected in 2028.
- EPRA has extended the Field Development Plan review to December 31.
Image: FILE
Kenya's dream of joining the oil exporters club petrodollar remains intact and is just awaiting a revision of the Field Development Plan (FDP), with commercial exports expected in 2028, according to oil giant Tullow.
Tullow Kenya BV managing director Madhan Srinivasan told the Senate Energy Committee that the firm has a strong balance sheet and the technical capability realise the dream that has stalled for a decade since the first exploration in 2012.
“Tullow submitted a Field Development Plan (FDP) in March 2023 and we are working on final revisions following feedback from EPRA. Upon reaching final approval, we can commence critical workstreams to enable the project to reach a final investment decision (FID),'' Srinivasan said.
Sources close to the matter told the Star that the energy regulator rejected the FDP in July and a review has been extended by six months to December 31.
The plan, which outlines the strategy and steps the UK firm will take in developing the fields where oil was discovered in 2012, has experienced a back and forth between the exploration company and the government since December 2021.
If approved by the Energy and Petroleum Regulatory Authority in December, it still needs to get further nods from the Ministry of Energy and Parliament before the firm is handed a production license.
The company told Senator Wamatinga Wahome's led committee that Tullow Oil is building a better future through responsible oil and gas development.
According Srinivasan, the key milestone to advancing the project and unlocking value rests on finding a strategic partner to apportion the capital exposure and risk due to the scale of the project investment.
"Once a strategic partnership is secured, the next challenge is to secure project financing. Tullow has a robust financial position and has generated over $1 billion of free cash flow between 2020-23, with a further $200-300 million expected in 2024.”
He said unlocking value from Kenya’s discoveries remains a key catalyst for Tullow and the firm is confident the development of the material resource base can reshape Kenya’s energy landscape, bringing multiple financial and broader social benefits to the nation.
“Tullow is building a unique Pan-African operator platform and features a highly experienced management team, which is committed to Africa,” Srinivasan said. He added,
Outlining the firm’s delivery capability, Srinivasan said Tullow has a track record of consistent top-tier operating capability and performance.
He gave an example of the firm's success story in Ghana, saying that over the past four years, the new management team in Tullow has achieved a major operational turnaround, resulting in higher operating and capital efficiency, and reduced operating and drilling costs.
Tullow has operated the Kenyan assets and spent over $2 billion since the first discovery in 2012, which returned a discovery of 585 million barrels of oil.
The Kenyan unit is an affiliate of Tullow Oil Plc, an independent energy company, with total annual revenues of more than $1.634 billion (Sh210.8 billion) in 2023.
For the first half of 2024, Tullow recorded revenues of $759 million (Sh97.91 billion), a gross profit of $460 Million (Sh59.3 billion), and a profit after tax of $196 million (Sh25.28 billion).
The multi-national Oil and Gas exploration company located in Turkana County says the commercial viability extraction phase will see Kenya extract and export a minimum of 120,000 barrels of crude oil to both regional and global refineries.
Tullow was in a joint venture with Africa Oil Corporation and Total Energies – which held a combined stake of 50 per cent – leaving Tullow as the sole player in the project.
The two firms quit the project last year citing differing strategic objectives. Kenya The is yet to give consent to their withdrawal from the project.