TotalEnergies and Africa Oil have informed Tullow Oil of their intention to quit the South Lokichar project in Kenya for differing internal strategic reasons. The project, which aims to tap about 460 mbl of oil in multiple fields in the country’s Turkana county, exporting 130,000 bbl/d via an 895 km pipeline to a terminal in Lamu port, is currently owned by Tullow Oil (50%, operator) in partnership with TotalEnergies and Africa Oil that jointly hold the remaining 50% stake. Tullow Oil’s interest in the project will increase from 50% to 100%. Africa Oil has already submitted withdrawal notices to its joint venture partners on Blocks 10BB, 13T and 10BA, to withdraw from the entirety of the joint operating agreements (JOAs) and Production Sharing Contracts (PSCs) for these concessions.
The updated Field Development Plan (FDP) was submitted to the Kenyan Energy and Petroleum Regulatory Authority (EPRA) in March 2023 and is now under review. If the country approves the FDP, it would open the possibility of bringing in new partners and raising financing. In such a scenario, a final investment decision (FID) could be made in 2023 or 2024. As a result, it is projected that first oil production could begin in 2027, which is a delay of at least five years and comes 15 years after the initial discovery of oil in Kenya. The country does not currently produce oil.