Kenya suspends the Early Oil Pilot Scheme

Last Updated 8 years ago by Kenya Engineer

Energy Cabinet Secretary Charles Keter has said that the Early Oil Pilot Scheme (EOPS) will now be postponed to later in the year pending approval of the Energy Bill 2016. This is after Tullow Oil threatened to suspend its operations in Turkana County at a time when the transportation of crude oil to Mombasa for export should have been starting. This and other developments had put the plan for early oil export plan in shambles. “After consultation with stakeholders in the county, we will do it by the end of the year,” Mr Keter told journalists on 29 June.
Media reports indicate that for close to a month before this, Tullow’s employees have not been working at the two sites where they keep 40,000 barrels of oil; part of the first batch of crude that is supposed to be transported by trucks to Mombasa is stored. ESOP planned to produce oil from five existing wells in northern Kenya, with a target of 2,000 barrels a day in its first phase.
The reports further indicate that one of the seven companies contracted to upgrade the Kitale-Turkana road, which leads to the oil fields, has suspended works after three of its employees were attacked. One worker got shot in the attack. The contractor Rowla Construction wishes that Kenya Highways Management Authority (KeNHA), guarantee the safety of its workers before works can continue.
Prime Fuels Kenya, Multiple Hauliers and Oilfield Movers in May 2017 clinched the KES 1.5 billion tender to transport the crude oil to Mombasa under the Early Oil Pilot Scheme and were supposed to start moving the oil mid-June. This is yet to start. The national government through Petroleum Principal Secretary Andrew Kamau has acknowledged the critical security situation and said they could not send trucks to the area because it was too risky.
Tullow had indicated that Ngamia 3 and 8, have 40,000 barrels of already pumped crude which is stored in tanks awaiting evacuation. In other appraisal and field development activities Tullow indicated some progress in their latest reports released in late June. They reported exploration and appraisal success in Erut -1 exploration well, which extended the proven oil limits to the northernmost end of the South Lokichar basin, and the Emekuya-1 exploration well which demonstrated oil charge across a significant part of the Greater Etom structure.
Tullow also drilled the Amosing-6, Ngamia-10 and, most recently, Etom-3 appraisal wells, the results of which they are incorporating into ongoing field development planning activities. Tullow and its partners have increased their appraisal campaign by a further four wells. The additional wells will further explore prospects adjacent to the Greater Etom structure and test an undrilled fault block adjacent to the Ekales field.
A further well, Ngamia-11, will be drilled and completed for use in an extended water flood pilot test in conjunction with the Early Oil Pilot Scheme. Water injection testing on the Amosing and Ngamia fields has been successful and demonstrated the feasibility of water injection for the development of these fields.
The EOPS Agreement between the Joint Venture Partners of Tullow and the Government of Kenya was signed on 14 March 2017 allowing all EOPS upstream contracts to be awarded. The first stage of the EOPS was to be the evacuation of the stored crude oil, which was produced during extended well testing in 2015, to Mombasa by road. This will be followed by an extended water flood pilot test in Ngamia and EOPS production of 2,000 bopd which is expected to commence in late 2017. Results from the Ngamia waterflood pilot will assess sustainable production levels to inform the overall resource and Full Field Development Plan.