Kenya is gearing up to make its first small-scale export of 200,000 barrels of crude oil worth US$ 12 million by September, London-based Tullow Oil has disclosed.
The multinational oil production company has exploration and oil fields in Turkana, Northern Kenya.
“200,000 barrels of oil have been safely delivered to Mombasa. Tullow expects East Africa’s first export cargo of oil to be sold and lifted in the third quarter of 2019,” Tullow oil says in its latest trading update.
The oil stocks are valued at about US$ 12 million based on the international crude oil prices of about US$63 per barrel.
The Kenyan government and Tullow Oil had expected to commence the crude oil exportation under the Early Oil Pilot Scheme (EOPS) by June but failed due to the company only having trucked about half of the amount that was needed for the first shipment.
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With the commercial production estimated to start in the second half of 2023, the export of the 200,000 barrels are intended to test the international markets’ reception to Kenya’s low-Sulphur oil.
Tullow has been moving the oil by road to Mombasa, a process that was marred by challenges owing to logistical issues and late issuance of regulatory approvals for the production and trucking of the commodity by road. It started moving about 600 barrels of oil per day (bpd) and raised the volume to 2,000 in May.
The multinational says that recent agreements it signed with the government and ongoing regulatory and infrastructure works give it confidence that the project will be profitable even at low oil prices but did not indicate the venture’s break-even price per barrel.
“This represented a material and encouraging step forward which gives all parties confidence that the project will be robust at low oil prices,” Tullow said.
[…] month, Kenya announced the sale of 200,000 barrels at a cost of US$ 12 million based on the international crude oil prices of about […]