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Kenya's Oil Production Set to Take Off by 2026

Strategic Insights

— 1 min read

Kenya is poised to become a crude oil exporter by the end of 2026, with the first commercial export expected from the South Lokichar oil fields in Turkana County. Energy Cabinet Secretary Opiyo Wandayi announced that preparations are underway for Kenya to begin commercial oil production, following earlier delays attributed to investment transitions and regulatory processes. The government is seeking parliamentary approval of the Field Development Plan, which will facilitate the construction of a pipeline and processing infrastructure. The move is part of the Ministry of Energy's 2023-2027 Strategic Plan, aiming to attract over Sh145 billion in new investments into the country's oil and gas sector.

Key Takeaways:

  • Kenya is expected to export its first barrel of crude oil by December 2026 from the South Lokichar oil fields in Turkana County.
  • The government is seeking parliamentary approval of the Field Development Plan, which includes the construction of an 824-kilometre crude oil pipeline from Lokichar to the Lamu Port.
  • The pipeline design has been revised to a 20-inch diameter to accommodate increased volumes, with the construction set to proceed in phases upon Field Development Plan approval.
  • A central processing facility will be built in Lokichar with a daily capacity of up to 120,000 barrels, alongside crude storage infrastructure at both Lokichar and Lamu.
  • The government has allocated more than Sh2.4 billion for project preparation and feasibility studies across the 2023-2026 budget period.
  • Gulf Oil is in the process of acquiring Tullow Oil's Kenya operations, with the government remaining hopeful that the investor will marshal the necessary financial and technical capacity to advance the project.
  • The Ministry of Energy's 2023-2027 Strategic Plan aims to attract over Sh145 billion in new investments into the country's oil and gas sector, including licenses for new petroleum blocks, upgrading petroleum depot infrastructure in Kisumu, Eldoret, and Nakuru.

Statistics:

  • Sh2.4 billion allocated for project preparation and feasibility studies across the 2023-2026 budget period.
  • 824-kilometre crude oil pipeline to be constructed from Lokichar to the Lamu Port.
  • 20-inch diameter pipeline design to accommodate increased volumes.
  • 120,000 barrels daily capacity of the central processing facility in Lokichar.
  • More than Sh145 billion in new investments planned by the Ministry of Energy's 2023-2027 Strategic Plan.

Sources:

  • Fixing the Nation interview on NTV with Energy Cabinet Secretary Opiyo Wandayi.

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