Tullow Oil release trading statement and operational update in advance of Group’s Half Year Results

Tullow Oil Amosing rig site Kenya
Amosing rig site in Kenya. Photo: Tullow Oil

Tullow Oil have reported that significant progress has been made over the first six months of the year in Kenya on both the Early Oil Production Scheme (EOPS) and the Foundation Stage of Project Oil Kenya.

The information was released as part of a trading statement and operational update summarising recent operational activities and to provide trading guidance in respect of the financial half year to 30 June 2019.

Tullow reported that in Kenya during May 2019, EOPS production was increased from 600 bopd to 2,000 bopd and the reservoirs, wells and associated facilities have been performing well. Over 150,000 bbls of oil have been safely delivered to Mombasa so far and Tullow expects the first export cargo to be sold and lifted in the third quarter of 2019.

They added that Joint Venture Partners and the Government of Kenya have concluded negotiations around key fiscal and commercial principles for Project Oil Kenya with agreements between the parties documented in various Heads of Terms which were signed by the Joint Venture Partners and the Government of Kenya in Nairobi yesterday.

“This is a material and encouraging step forward which gives all parties confidence that the development project will be robust at low oil prices. In addition, the completion of the FEED studies for both the upstream and midstream, together with recent market soundings provide increased confidence in the project’s capital expenditure estimate and construction timetable that is expected to see first oil three years after the Final Investment Decision (FID),” the statement said. 

“The Government of Kenya continues to make good progress, both in acquiring the land for the upstream and pipeline and securing water rights for the upstream. While these activities are progressing well, they are taking longer than originally forecast. The National Environment Management Agency has requested that additional community consultation take place for the Environmental and Social Impact Assessments (ESIAs) which will now be submitted in the second half of 2019 which is later than anticipated.

“All parties continue to work well together across all development workstreams and significant progress has been made so far this year. However, despite this progress, the Partners and the Government of Kenya are reviewing the most likely timeline to FID which Tullow now expects in 2020,” Tullow added.

Yesterday’s statement was made in advance of the Group’s Half Year Results, which are scheduled for release on Wednesday 24 July 2019.

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