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Kenya to gazette five new oil blocks for auction
Tullow Oil facility at Ngamia 8 in Lokichar, Turkana County, on February 18, 2020. The government targets to demarcate and gazette up to five new oil exploration blocks for the auction of licences for oil and gas exploration.
The government targets to demarcate and gazette up to five new oil exploration blocks for the auction of licences for oil and gas exploration.
A work plan by the Petroleum Ministry shows that the State targets to create the five new blocks within the financial year starting July and market a total of 45 blocks with a round licence auction set for 2024/2025.
The government also targets to conclude a field development plan (FDP) for the South Lokichar oil field and build a mega water pipeline from the Turkwel River dam to the Turkana situated oil field where the country in 2012 struck oil reserves that are yet to be developed.
The State has apportioned Sh2.71 billion for oil and gas exploration in the new financial year starting July.
“In the medium-term 2023/24-2025/26, the State Department has prioritised programmes and sub-programmes intended to provide policy, the legal and institutional framework for exploration, development, production, and commercialisation and ensure the security of supply of oil and gas products for sustainable development,” the Petroleum department said in a work plan seen by Nation.
“In this regard, the State Department will finalise the field development plan for the South Lokichar oil field, review, demarcate and gazette a new block map in view of the anticipated bid rounds during the period, construct a water pipeline from Turkwel to the South Lokichar oil field” it added.
Kenya is eager for more oil discoveries to bolster the commercial viability of its oil programme. The country first announced the discovery of oil in March 2012 within the Lokichar Basin in Turkana County.
Tullow Oil and its former joint venture partners in the Turkana oil project Total Energies and Africa Oil in March this year submitted a revised field development plan (FDP) to the government for approval, as the venture steps up its search for a strategic investor.
Total Energies and Africa Oil quit the Turkana oil project last month leaving the British exploration firm with full ownership of the project.
Commercial drilling
The approval of the FDP—which will need to be ratified by Parliament —will enable the venture to get a government license to commence commercial drilling of crude oil in the 10BB and 13T oil blocks in Turkana County.
The FDP plan for the Turkana oil field, which was initially submitted in December 2021, was revised after it emerged that the commercially recoverable oil from the reserves is significantly larger than previously estimated.
An 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 evacuate the oil to Lamu, increasing the projected cost of the project from Sh319 billion to Sh377 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.
Besides the Lokichar basin, the State targets to step-up oil exploration on Block 14T in the Magadi Basin that straddles Kajiado, Narok, Nakuru, and Baringo counties. The stepped-up campaign on the Magadi Basin comes barely two years after the National Oil Corporation of Kenya (Nock) concluded a Magnetotelluric (MT) exercise on the basin in 2021—an exercise that was aimed at gathering more data on potential petroleum reserves and help in the identification of drill-able prospects in the block.
