Kenya, Uganda to commence oil production in mid 2020 – Tullow Oil

Kenya and Uganda could start producing oil three and a half years after project sanction expected by the end of 2016 according to the latest half year results by the company.

According to the report the company expects to have drilled 200 to 300 wells in phases in Kenya almost of those to be drilled in neighboring Uganda where the company targets 500 wells.

Currently the development initially targets the South Lokichar Basin where there has been nine out of eleven wildcat discoveries with the decision on other basins namely Kerio, North Turkana, North Lokichar, Turkana South, Turkwell, Suguta South and North basins as well as the Nyanza basin in block 12B expected pending exploration success.

The company has already seen disappointment at Kodos-1 and Engomo-1 in the Kerio and North Turkana basins while in Uganda the company targets a basin wide development.

To date the JV partners have drilled 13 appraisal wells with further appraisal and well testing ongoing with current potential unconstrained flow in the tested wells placed at 5,000 bopd per well. In Uganda over 80 exploratory appraisal wells have been drilled with anticipated production rates between 3,000 – 5,000 bopd per well.

In Uganda the company expects to have its production licenses approved in the second half of 2012 after settling a tax dispute with the Ugandan government while commercial and financial structuring of agreements is expected in 2016.

On the integrated pipeline the Kenya and Ugandan governments are still working with technical advisor to select route with conceptual studies completed on Northern and Southern Route.

On upstream developments in the region the company expects Uganda/Kenya FDP submissions to be complete early 2016 while Upstream FEED will start-up in early 2016.

Recent market study suggests potential to further reduce Uganda capex of $6/bbl by around 20% while Kenya development engineering and capex estimates are ongoing.