Review of Turkana oil plan extended to June

The evaluation of a field development plan (FDP) submitted by Tullow Oil for the Turkana oil fields has been extended to June.British oil firm Tullow.An FDP outlines how an oil company intends to develop a petroleum field, manage the impact on the environment and society, as well as give forecasts for production and costs.

Epra initially said the decision on the revised plan would be made by June 2023, but the Ministry of Energy and Petroleum later pushed the deadline to September. The FDP was initially submitted to the government in December 2021 but was later revised to make it economically viable at lower global crude oil prices.

The revised FDP, which followed an audit that revealed their commercially recoverable oil reserves in Turkana are at least 14 percent larger than previously estimated.The audit by British petroleum consulting firm Gaffney, Cline & Associates led the firms to revise the production capacity of the oilfields to 120,000 barrels of oil per day (bopd), up from previous estimates of 70,000 bopd.

This saw the revision of the FDP that has increased the size of the crude oil processing facility in Turkana and the size of the pipeline to transport the oil to Lamu, increasing the projected cost of the project from Ksh319 billion ($2.23 billion) to Ksh377 billion ($2.64 billion).The revised FDP also increased the diameter size of the planned Lokichar-Lamu crude oil pipeline from 18 inches to 20 inches to handle a higher product volume and drilling of additional exploration wells.

However, the final decision on whether the revised FDP is accepted or rejected will be made by parliament.“The Group expects a production license to be granted once government due process has been completed,” says Tullow. Tullow owns a 100 percent interest in the project after its joint venture partners Africa Oil Corporation and Total Energies withdrew in May last year quoting differing internal strategic objectives as reasons.The two firms held a 25 percent stake each in the project that comprises blocks 10BA, 10BB, and 13T in South Lokichar in Turkana.
The company however says it will decide on whether to continue with the project once the FDP is approved and also if some key conditions are met.

The final investment decision (FID), Tullow says, will be made once it receives and finalizes an acceptable offer from a strategic partner.The FID also hinges on whether it will secure approvals from the Kenyan government regarding the provision of the required infrastructure for the project such as a crude oil pipeline and fiscal terms.“These items require satisfactory resolution before the Group can take a Final Investment Decision (FID). The Group continues to progress with the farm-down process,” it said.