Kenya ready to export Sh1bn crude oil stocks

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Kenya has pumped out 200,000 barrels of crude oil with a current market value of Sh1.3 billion, with the country gearing up to make its first small-scale export of the commodity by September.

The oil production statistics have been disclosed by London-based Tullow Oil which 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,” the multinational says in its latest trading update.

The oil stocks are valued at Sh1.3 billion based on the international crude oil prices of about $63 (Sh6,500) per barrel.

The exports are intended to test the international markets’ reception to Kenya’s low-sulphur oil ahead of commercial production that is now estimated to start in the second half of 2023.

Tullow has been moving the oil by road to Mombasa. 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.

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