To attract funds for development of its Turkana petroleum deposits, Kenya has signed an agreement with oil multinationals according the Petroleum Principal Secretary, Mr. Andrew Kamau. It is expected that the deal will attract funds to the tune of $3 billion and will take the country ahead of its neighbour, Uganda. Kenya discovered crude deposits in 2012. Uganda, discovered crude deposits six years earlier than Kenya. However, its negotiations with oil multinationals reached a deadlock resulting in the suspension of production and export. Following the tax disagreement with Uganda Revenue Authority, Total suspended the oil export pipeline project to the port city of Tanga.
Kenyan petroleum ministry has finalised an information memorandum that will be circulated to global financiers who may have the appetite to put in money in the Turkana oil project. The information memorandum brings it closer to signing the Final Investment Decision (FID), which is targeted to be signed by mid next year. The FID will lead to drilling and commercial production expected in late 2023 or 2024.It has identified 10 potential banks, both local and international. The MOU signed with oil multinationals will see Kenya contributing $467 million to finance upstream and midstream projects to facilitate commercial production.
In June, Kenya also signed the terms of agreement with Tullow, Total and Africa Oil, the joint venture partners involved in development of the Turkana oilfields, streamlining the obligations of each party and investments required for commercial production. The Kenyan government, Tullow, Total and Africa Oil together have to raise $1.9 billion in equity to finance the drilling of 320 wells and flow lines connecting the crude deposits that will link it to a central processing facility that will connect to the pipeline. Tullow is the majority shareholder for upstream with a 50 per cent stake . Africa Oil and Total each hold 25 per cent stakes.
Kenya’s first shipment of 250,000 barrels of early oil exports took place in August, when it sought to test market for its crude deposits on the international markets.
