GlobalData: Kenya’s first commercial oil find could generate $10 billion

Kenya’s first commercial oil discovery in South Lokichar basin’s Block 10BB/13T could yield $10 billion in revenue over a 30-year production period based on regional geological characteristics and well test results, according to an analyst with research and consulting firm GlobalData.

John Sisa, who covers upstream oil and gas in the sub-Saharan region, stated that the volume of cash flow from Block 10BB/13T would enable Kenya’s gross domestic product to rise at an average rate of 0.83%/year from its current $40.7 billion.

He pointed out that international interest in Kenya’s oil and gas sector has intensified over the past 20 months.

Tullow Oil PLC and Africa Oil Corp. have made five discoveries since 2012 and plan to run six rigs full time for the foreseeable future (OGJ Online, July 5, 2012; Nov. 22, 2013). The companies continue to advance exploration activities on the block (OGJ Online, Mar. 28, 2014).

Although the nation’s first competitive licensing round has been put off until this year’s fourth quarter at earliest, the delay could serve to build interest, Sisa said.

“The delay in Kenya’s first licensing round could prove beneficial to the country’s economy, as international oil companies (IOCs) could make additional, commercial oil and gas discoveries before the end of the year. This would in turn strengthen prospectivity and interest in the country’s oil and gas industry.”

He said, “Additionally, competition among IOCs during the delayed bidding process may be significantly greater than at present, and the round could include higher licensing costs and tougher fiscal terms that would maximize government revenues.”

Infrastructure development  

Sisa thinks the Kenyan government has indicated its willingness to develop an early oil production facility by 2016, allowing Tullow to produce oil from Block 10BB/13T at marginal rates until the proper infrastructure is in place for shipment.

“This early monetization of oil reserves would generate more revenue for the Kenyan government’s budget and would therefore act as a crucial component of economic growth,” he said. “Similarly fundamental in accelerating such growth is the proposed development of the Kenya-Uganda crude oil pipeline, which is designed to pass through Block 10BB/13T and South Sudan (OGJ Online, Mar. 30, 2009).”

A new port is being developed in Lamu, Kenya, which would also host a refinery that receives oil from Uganda, South Sudan, and Tullow’s Block 10BB/13T (OGJ Online, July 12, 2010; Jan. 26, 2012). GlobalData expects this refinery to be launched by 2018.

Related Articles

ExxonMobil settles charges stemming from Arkansas pipeline leak

04/22/2015 Two ExxonMobil Corp. pipeline subsidiaries agreed to pay $5 million to the US government and the state of Arkansas to settle charges stemming from ...

Court greenlights Chevron’s Richmond refinery project

04/22/2015 A California superior court has cleared the way for Chevron Corp. to proceed without further delay in executing its long-planned, $1-billion projec...

MARKET WATCH: NYMEX crude oil drops pending weekly inventory report

04/22/2015 Crude oil prices for May delivery dropped more than $1/bbl on the New York market Apr. 21 upon reports that Saudi Arabia was halting air strikes ag...

First QER proposals include local gas system improvement assistance

04/22/2015 The White House recommended that the US Department of Energy concentrate on modernizing the nation’s energy transportation, storage, and distributi...

LNG export limits violate US free trade tradition, ExxonMobil executive says

04/21/2015 The US should remove the national interest demonstration requirement for LNG exports to countries with which it does not have a free-trade agreemen...

New energy-rich African nations want to avoid mistakes, forum told

04/21/2015 Lower crude oil prices may give African nations more time to develop new supplies, speakers said at a Center for Strategic and International Studie...

Statoil lets carbon dioxide service contract for Bakken

04/21/2015 Statoil has let a major carbon dioxide supply and service agreement to Ferus LP of Denver to supply liquid CO2 to be used in a test well to evaluat...

CERAWeek: Murkowski to introduce bill this year to lift oil export ban

04/21/2015 US Sen. Lisa Murkowski (R-Alas.) told IHS CERAWeek in Houston that she plans this year to introduce legislation to repeal the decades-old ban on US...

MARKET WATCH: NYMEX crude oil climbs modestly on reduced storage concerns

04/21/2015 Crude oil prices for May delivery climbed modestly on the New York market Apr. 20, which analysts attributed to reports of reduced concerns for now...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected