Last week, Kenya became the latest African country to export oil after its first cargo of 200,000 barrels earned the country $12 million. The major development was made known by President Uhuru Kenyatta.
“We are now an oil exporter,” President Kenyatta announced the breakthrough concisely in a tweet. About 16 of the total 55 African countries are strong exporters of oil with some of the biggest being Nigeria, Angola, Algeria, Libya, and Egypt.
The first export is meant to test the international markets’ reception of Kenya’s low-sulphur oil ahead of commercial production, expected to kick off in the second half of 2023. The government had set $43 per barrel as the break-even point for the Early Oil Pilot Scheme but the sweet light crude sold at $60 per barrel, a spike of nearly 40 percent.
The President further expressed confidence in the oil trade potential as a catalyst for economic growth and poverty eradication. “So, I think we have started the journey and it is up to us to ensure that those resources are put to the best use to make our country both prosperous and to ensure we eliminate poverty.”
As reported by the East African, the oil production statistics were released by the multinational Tullow Oil, which has exploration and oilfields in Turkana. In its trading update, the London-based company said some 200,000 barrels of oil had been safely delivered to Mombasa and it expects East Africa’s first export cargo of oil to be sold and lifted in the third quarter of 2019.
Tullow has been moving the commodity by road to Mombasa, starting with about 600 barrels per day (bpd), but later raising the volume to 2,000 in May. Being in the early stage of oil exportation, Kenya does not have pipelines yet for that purpose. However, the government as of late last month had begun surveying the route of the Lokichar-Lamu oil pipeline.
After the completion of the Front End Engineering Design (FEED) study for the $2 billion pipeline, the National Lands Commission (NLC) embarked on land surveys which shows Kenya is determined to commence construction of the 821-kilometre heated pipeline as the country targets first commercial crude exports in four years time.
Initially, Kenya had intended to begin commercial exports of between 60,000 to 80,000 barrels of crude per day in three years time, as the plan was to have the Final Investment Decision (FID) signed later this year. The country has, however, been forced to reschedule after it emerged that the earliest the FID can be signed is in mid-2020.
Besides, delays in land acquisition and submission of the environmental and social impact assessments (ESIAs) to the National Environmental Management Agency (NEMA) expected to be done later this year is slowing down the progress of the project.
In terms of mining and exploration, Kenya’s petroleum industry is relatively new. Oil was first discovered in 2012 by Tullow and the country’s crude reserves are estimated at 500 million barrels with about 400 million considered recoverable. Kenya’s crude is expected to hit the international market on a large scale in 2022.