Uhuru: Kenya strikes Sh1.2 billion oil export deal

Kenya has joined the league of oil-exporting countries, President Uhuru Kenyatta says.

The president said Thursday from State House that Kenya concluded the first deal on Thursday with 200,000 barrels at a price of Sh1.2 billion ($12m).

“We are now an oil exporter. Our first deal was concluded this afternoon with 200,000 barrels at a price of 12 million US dollars. 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,” President Uhuru said.

Kenya, which currently exports no crude, discovered commercial oil reserves in its Lokichar basin in 2012 and Tullow Oil estimates the basin to contain an estimated 560 million barrels in so-called 2C proven and probable oil reserves.

Tullow has said this would translate to 60,000 to 100,000 barrels per day of gross production.

The government and Tullow Oil had expected to start exporting crude under the Early Oil Pilot Scheme (EOPS) by June this year but that appeared unlikely with the company only having trucked about half of the amount that will be needed for the first shipment.

In May, the Ministry of Petroleum said about 88,000 barrels of oil had so far been trucked to Mombasa and was targeting to accumulate 200,000 barrels that would form the first export cargo.

The oil that has been ferried to Mombasa was produced in 2015 during an extended well testing exercise.

By end of March, Tullow had shipped all the oil stored in Lokichar and has been setting up an Early Production Facility, which will produce 2,000 barrels a day.

This oil will also be moved by road to Mombasa for stockpiling before it is exported.