Tullow Oil, the company hired to mine Turkana oil in Lokichar will use at least Ksh110 billion ($1.1 billion) to construct the pipeline that will transport crude oil from Lokichar wells to Lamu. The oil company has hired UK based Wood Group to design the 800km (500-mile) pipeline.
In addition, Ksh290 billion ($2.9 billion)will be needed for upstream operations, Tullow says. Tullow picked Australia’s Worley Parsons as engineers for its oil blocks.
A final investment decision on the upstream and pipeline plans is expected in 2019.
Upon completion, the oil will be stored in the Kenya Petroleum Oil Refinery storage tanks, which are being revamped at a cost of Ksh200 million. Tullow estimates that 2,000 barrels will be transported on daily basis.
Tullow operates the oil fields, while the other investors are Canada’s Africa Oil and France’s Total. The government is expected to take a stake through state-owned National Oil.
Tullow says Amosing and Ngamia fields in the basin have estimated contingent resources of about 560 million barrels, with plateau production potentially reaching 100,000 barrels per day.
Early this month, President Uhuru Kenyatta flagged off the first consignment of crude oil destined for export from Kenya.
Tullow Oil Managing Director Martin Mbogo said the sector could be raking in about Sh120 billion ($1.2 billion) annually.
Oil in Kenya was discovered in 2012 and since then, 40 wells have been drilled and the crude oil output is expected to hit 80,000 barrels a day by 2022.