Kenya’s government is evaluating the final field development plan (FDP) for Tullow Oil’s $3.4 billion Lokichar oil project that was recently submitted for approval a few weeks ago.
A spokesperson for Tullow said the FDP was “submitted in December” and is “being reviewed by the government,” noting that the development plan is not a public document.
Nevertheless, the operator did reveal the broad details of the revamped project in September, having earlier submitted a draft FDP.
The original 80,000-bpd, multi-field project was delayed due to commercial concerns amid the oil price collapse and the impact of Covid-19, so the partners — which include TotalEnergies and Africa Oil — decided to improve its economics.
The new, higher-cost scheme will tap 585 million barrels of oil — 30% more than originally planned — while the capacity of the 825-kilometre oil export pipeline to Lamu port on the Indian Ocean has been expanded to handle 130,000 bpd and its diameter consequently increased from 18 to 20 inches.
Assuming the project is sanctioned this year, then first oil could flow in 2025 or 2026.
The partners are looking for other companies to take stakes in what Tullow said is an “attractive” asset located in the remote and arid Turkana region of northern Kenya whose oil in-place resources are 2.85 billion barrels.
Tullow is still going with a phased development, kicking off with the Ngamia and Amosing fields that account for 50% of the overall project’s resources.
This initial phase also includes the Ekales and Twiga fields, boosting the overall resources to be tapped in this stage to 390 million barrels from 273 million barrels previously.
Lokichar’s partners have optimised the number of development wells, and have increased the number of production wells compared to water injectors in a move to boost reservoir pressure support and increase recovery rates.
The project’s upstream facilities have also been increased in size to handle the bigger volumes of oil and water.
Africa Oil said the cost of the upstream facilities is about $2 billion, with the pipeline costed at $1.4 billion.
The revised scheme is expected to lower unit costs to $22 per barrel from about $31 per barrel previously.
Carbon emissions will be limited through a combination of heat conservation, the use of associated gas for power, and the reinjection of excess gas.
The operator said opportunities also exist to use Kenya’s national grid — substantially powered by renewables — and other options to offset remaining emissions.
The export pipeline will be heated and buried to ensure continuity of oil flow, while water needed for injection purposes will be piped from Turkwel dam.
Africa Oil said previously the partners are working with Kenya’s government on land and water access issues and commercial agreements, while also waiting for regulators to rubber-stamp the project’s environmental and social impact assessment report.
Tullow has a 50% stake in the project with TotalEnergies and Africa Oil each holding 25% interests.
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