Kenya in $50m World Bank oil loan

Kenya is to receive a $50 million interest-free loan from the World Bank to help build up capacity to manage its oil and gas industry, according to a report.

The loan from the bank’s International Development Association would support the Kenya Petroleum Technical Assistance Project, Reuters reported, citing a statement from the bank.

The Kenyan project aims to attract private investment as well, while also building up capacity within government to deal with the country’s emerging hydrocarbons industry, the news wire reported.

Kenya has had a number of discoveries, the vast majority onshore, but trails behind regional neighbours Tanzania, Mozambique and Uganda in terms of high-impact discoveries made so far.

Tullow Oil has had some notable onshore successes, but one of the most notable recently was BG Group’s oil discovery at the offshore Sunbird-1 wildcat on licence L10A in the Lamu basin. The UK major hit 9.2 metres of oil pay overlying a 28.3-metre gas column in a Miocene Limestone reservoir last month.

Kenya is also set to play host to a pipeline linking its fields and those in Uganda and Rwanda to the Kenyan Indian Ocean port of Lamu. The governments of the three countries are currently on the hunt for a contractor to carry out a feasibility study and early engineering work on the $4.5 billion, 1300-kilometre oil export pipeline.

The huge pipeline will be developed as a single project but split into two segments. The first segment would run from Hoima to the Uganda-Kenya border, while the second would run from the border to Lamu via Lokichar.

A later stage of the line would link Hoima with Rwanda — and maybe even Burundi — but it is unclear if this would be an option under this contract’s scope of work. The pipeline will be buried and heated to handle the waxy and viscous crude discovered in both Uganda and Kenya.

First oil could flow along the main pipeline to Lamu by 2018 at the earliest, although a 2019 to 2020 timeframe is believed to be more likely.

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