Kenya signs landmark deal for first ever oil development
This article was originally published on the Africa Oil & Power website
Kenya’s Ministry of Petroleum and Mining has signed a Head of Terms agreement with oil majors Total, Tullow Oil (Tullow) and Africa Oil Corp for the development of a 60,000 – 80,000 barrels per day (bpd) processing facility for oil discovered in the country’s northwest, as well as a crude oil export pipeline to Lamu.
The landmark agreements signed with the joint venture partners are for the discoveries of oilfields in Bock 10BB and 13T, in particular in the Amosign, Ngamia and Twiga fields.
Speaking during the signing in Nairobi on Tuesday, the ministry’s Cabinet Secretary, John Munyes, said that the agreements signed would provide “a framework and commercial certainty required to move ahead with negotiating the fully termed upstream and midstream long-form agreements ahead of the projects’ final investment decision (FID).”
In an updated statement, Tullow oil said it now expects to see first oil three years after FID. On Tuesday, the firm had said it would reach FID by the end of this year.
“We have absolute fiscal certainty and we need to make sure that this project will make money for the government of Kenya and for the international contractors at the current oil price uncertainty and low oil prices globally,” said Tullow Executive Vice President, Mark Macfarlane said in his initial statement.
At a combined estimated cost of $3 billion, this project will be the largest single private investment in Kenya.
Tullow is operator on the project and holds a 50 percent interest while Total S.A and Africa Oil Corp hold 25 percent, respectively.
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