More Oil finds in Kenya, production in sight says IMF
|An oil Rig: More finds, quantity upgrades |
production in sight in Kenya
KENYA COULD start producing oil by 2019/20-"In 6-7 years’ time" says the IMF in document published in April this year.
The document, IMF staff report on Kenya, confirms that, the report of the oil find and its commerciality are real. It says that since the find in May 2012, some 23 oil prospecting companies have come to Kenya for prospecting licenses.
This report comes hot on the heels of a report that Kenya’s Rift Valley could be sitting on 10 billion barrels of crude oil. The Business channel, Bloomberg reported in April that Kenya’s oil stocks in the Rift Valley could top 10 billion barrel-enough to last Kenya 300 years.
Meanwhile, Tullow oil has announced another find in South of Lokichar Basin, also in the Rift valley. It also revised upwards the production estimates in the earlier two finds to 5000 barrels a day a piece from the earlier 2850 barrels a day.
The latest testing data from the Twiga South-1 and the Ngamia-1, says the company, indicate that the potential has risen to 5,000 barrels of oil per day per well. The firm also said that the total reserve in both wells is estimated at 250 million barrels but could rise further since tests are still going on.
Drilling of the Lokichar Basin began in May this year. The news that oil could be found in less than two months of drilling are exciting Nairobi. The firm is now testing the commercial viability of the new find..
Commercial viability means that the Oil quality and quantity in a well can be sold at market rates plus there are enough stocks to run for a few years. The increasing numbers of quantity estimates are looking a like a game changer for Kenya.
According official sources, in the year to November 2012, Kenya spend a staggering US$2.105 billion importing 21.7 million barrels of crude oil. Although the commercially viable output is still a drop in the ocean, the prospect of cutting this this bill significantly is exciting to Kenyans.
A local business publication reported last November that oil and Gas exploration brought in US$1.2 billion in FDI. This figure is expected to rise as more players are expected to bid for a piece of the action. 19 exploration blocks are said on the table for auctioning this year.
The flow tests show that the well can produce up to 5000 barrels per day, way above the 2850 barrels per day initially estimated.
|Lamu Port: Gearing to be energy |
Port city of East Africa
Meanwhile Uganda has decided to build an oil pipeline from its wells in Lake Albert in Western Uganda to a Kenya port. D.R. Congo is also said to be considering going east to export their oil through Kenya. This makes the Lapsset Corridor in Kenya, which was a mouth- watering prospect just a few months ago, a staggering one.
Two weeks ago, we reported that south Sudan has awarded the construction of the 200KM long pipeline from Juba to Lamu, to Toyota Tsusho, the investment arm of Toyota Motor Corporation. And last week, Uganda confirmed that it will build a Pipeline from its wells in Lake Albert to Juba then on to Lamu in Kenya. The implementation of Lapsset is now US$3.50 billion down; there is US$19.5
billion to go.
Even then, there is plenty of activity on Kenya’s second transport and economic corridor over the next 20 years or so. Already, the government has set aside some US$500 million for the construction of the first three- berths at the Port of Lamu.
The three are; a general cargo berth, a bulk cargo berth and a container berth. These three will be used to transport material for the development of the corridor.