By Edwin
Okoth, NAIROBI Kenya
Kenyans will have to wait until after 2025 for petrodollars from Turkana oil fields to start trickling in after the government extended the exploration timeline for Tullow.
The British oil explorer Wednesday
said it had been granted another 15 months for exploration phase of the Turkana
oil project, essentially pushing ahead production timelines and extending the
long-awaited final investment decision.
Tullow in a statement accompanying
its half year results to June 2020 said the extension was part of the deal that
led to its lifting of a force majeure on the project last month.
The explorer said it had suspended
its intended sale of stake in the project without specifying its next move on
the intended farm down for a 50 percent shareholding in blocks 10BB and 3T in
the Turkana.
“Kenya has agreed to an initial
extension to the second additional exploration period for the 10BB and 13T
licence blocks until 31 December 2020 with a final extension until 31 December
2021, contingent on an agreed work programme and budgets. Separately, the farm
down process has been suspended while the joint venture partners complete a
comprehensive review of the development concept to ensure it continues to be
robust at low oil prices, and also consider the strategic alternatives for the
asset,” Tullow said in a statement.
The move now pushes further away
the timelines for the project that had originally been set for 2021 before
several extensions.
Tullow whose half year net earnings
dropped 138 percent to a loss of $1.3 billion, will need to source for funds
together with the Kenyan Government to build a pipeline after the investment
decision has been made.
This will be followed by another 38
months to build the Lamu-Lokichar pipeline, effectively putting Kenya’s first
yield from the oil resources beyond 2025.
The Kenya Civil Society Platform on
Oil and Gas said the new change of timeline reveals how slow the project has
been progressing closer to the production phase and risks its future prospects
as more delay may hurt its attractiveness for investments in the long run.
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