Tullow Oil pic (Tullow) has announced that, together with its Joint Venture Partners in Kenya, Total and Africa Oil Corp, have signed Heads of Terms with the Government of Kenya for the development of the oil fields in the South Lokichar Basin. This is a major and important milestone towards reaching a Final Investment Decision (FlO).
These Heads of Terms capture all of the key commercial principles related to the implementation of Project oil Kenya and provide both the framework and commercial certainty required to draft the fully termed upstream and midstream agreements ahead of FID. All parties have agreed that the Amosing, Ngamia and Twiga fields should be developed as the Foundation Stage of the development with a 60,000-80,000 bopd (barrels of oil per day) Central Processing Facility and an export pipeline to Lamu. The
infrastructure installed for the Foundation Stage will be utilised for the development of the oil discoveries in the future phases, allowing the incremental development of these fields to be completed at a lower unit cost.
Now that the Heads of Terms have been signed, the Joint Venture Partners will focus their efforts on securing financing for the pipeline while continuing to progress the ongoing Front-End Engineering & Design (FEED) and Environmental & Social Impact Assessment (ESIA) work that will lead to the selection of contractors ready for Final Investment Decision (FlO).
The Heads of Terms Agreements were signed today at the Ministry of Petroleum & Mining in Nairobi by Hon. John Munyes, Cabinet Secretary for the Ministry of Petroleum and Mining, and Martin Mbogo, Managing Director, Tullow Kenya, together with signatories from the Joint Venture Partners.
Mark Macfarlane, Executive Vice President, Tullow Pic also commented today:
“The signing of the Heads of Terms is a major milestone in the commercialisation of Kenya’s first oil development. Project Oil Kenya is expected to be the largest ever private sector investment in Kenya and these Heads of Terms underpin the long-term ond mutually beneficial partnership between Tullow, our Joint Venture Partners, and the Government of Kenya and is a major step forward towards delivering FID for the Project.”