Kenya lines up second batch of crude oil for export in February 2020
- The government is ratcheting up the volumes of exported crude oil as it seeks to score big from the generated economies of scale.
- Kenya will be seeking to hit the jackpot from changes to the International Maritime Organization (IMO) regulations as the marine sector is forced to reduce emissions through switching to lower sulphur fuels.
- The second batch of exports from Turkana will come in roughly 10 months to Tullow’s FID which is set for the end of 2020.
Kenya is set to export a second batch of 500,000 barrels of crude oil at the end of February 2020 to keep with the country’s ongoing tests of the quality of its petroleum deposits ahead of Tullow Oil’s final investment decision (FID).
The second export consignment which sits under the Early Oil Pilot Scheme (EOPS) initiative by government follows August’s shipping of Kenya’s first oil which raked in Ksh.1.2 billion ($12 million) from the offsetting of 240,000 barrels of crude.
Speaking at a media update of Kenya’s oil exploration on Tuesday, Brian Muriuki an advisor to the State Department of Petroleum said the government is ratcheting up the volumes of exported crude as it seeks to score from the economies of scale.
“We would anticipate better pricing from a larger load. With a larger vessel we would expect to get closer to Brent parity in terms of pricing,” he said.
Kenya will be seeking to hit the jackpot from changes to the International Maritime Organization (IMO) regulations as the marine sector is forced to reduce emissions by over 80 percent through switching to lower sulphur fuels.
While Kenyan crude has been described as waxy to require heating at room temperature, the batch is also described as sweet and light in attribution to its low sulphur profiling making it a gem to investors.
Similarly, Kenya’s first shipment at the end of August was valued at a near Brent Crude premium of Ksh.6198 ($6o) placing the country’s oil prospects at top-end market valuation.
As was the case in the first sale, potential investors are expected to battle out for the batch through the re-opening of the procurement window which saw Chinese ChemChina UK Limited capture the first consignment.
The second batch of exports from Turkana will come in roughly 10 months to Tullow’s FID which is set for the end of 2020.
According to the Petroleum State Department, the key commercial investment decision will be pegged on a number of interlocking factors including the approval of the project’s environmental impact assessment by the National Environment Management Authority (NEMA) and the completion of commercial agreements to new funding.
Having sunk an estimated Ksh.227.3 billion ($2.2 billion) to the project so far, Tullow is set to raise new equity alongside its triad of partners including Total, Africa Oil and the Government of Kenya.
Additionally, the quartet is set to pursue financing from the international debt market to the tune of Ksh.216.9 billion ($2.1 billion) with the majority of funds going into the laying of the proposed 824 kilometer heated pipeline to the port of Lamu.
Construction works to the mid-stream processes are expected to cover 36 months from the date of the FID to line up Kenya’s first fully commercially outputted crude to the end of 2023.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: | TEEN PREGNANCY PANDEMIC | Many girls will not resume schools when they partially open on Monday