Heads of Terms agreements with\nthe Government of Kenya and joint venture partners, Africa Oil, Tullow Oil plc\nand TOTAL S.A. have been signed for the development of the oil fields in the\nSouth Lokichar Basin. <\/p>\n\n\n\n
The Joint Venture Partners and\nthe Government of Kenya have concluded negotiations around key fiscal and\ncommercial principles for Project Oil Kenya with agreements between the parties\ndocumented in various Heads of Terms which were signed by the Joint Venture\nPartners and the Government of Kenya in Nairobi yesterday. <\/p>\n\n\n\n
This is a material and\nencouraging step forward which gives all parties confidence that the\ndevelopment project will be robust at low oil prices. In addition, the\ncompletion of the Front End Engineering and Design studies for both the\nupstream and midstream, together with recent market soundings provide increased\nconfidence in the project’s capital expenditure estimate and construction\ntimetable that is expected to see first oil three years after the Final\nInvestment Decision (FID). <\/p>\n\n\n\n
Mark MacFarlane, Senior Vice\nPresident, Tullow Plc also commented: \u201cThe signing of the Heads of Terms is a\nmajor milestone in the commercialisation of Kenya\u2019s first oil development. This\nis expected to be the largest ever private sector investment in Kenya. These\nHeads of Terms underpin the long-term and mutually beneficial partnership\nbetween Tullow, our Joint Venture Partners, and the Government of Kenya and\nkeeps us on track for delivering FID.\u201d<\/p>\n\n\n\n
All parties have agreed that the Amosing, Ngamia and Twiga fields should be developed as the Foundation Stage of the development with a 60,000-80,000 bopd (barrels of oil per day) Central Processing Facility and an export pipeline to Lamu. The infrastructure installed for the Foundation Stage will be utilised for the development of the remaining oil fields and future oil discoveries in the region, allowing the incremental development of these fields to be completed at a lower unit cost.<\/p>\n\n\n\n
\u201cThis phased approach brings\nsignificant benefits as it enables an early FID, takes advantage of the current\nlow-cost environment for both the field and infrastructure dev and provides the\nbest opportunity to deliver First Oil in a timeline that meets the GoK,\u201d said John\nMunyes, Cabinet Secretary for the Ministry of Petroleum and Mining.\n\n\n\n\n\n=e<\/p>\n\n\n\n
Keith Hill, President and CEO of\nAfrica Oil, commented, “We are very pleased with the signing of the Heads\nof Terms agreements as it marks an exciting step forward for the project. The\nconclusion of the negotiations around key fiscal and commercial principles is\nan important and major milestone towards a Final Investment Decision, providing\na solid development framework and confidence to all parties that the project is\nrobust at low oil prices.”<\/p>\n\n\n\n
The Government of Kenya continues\nto make good progress, both in acquiring the land for the upstream and pipeline\nand securing water rights for the upstream. While these activities are progressing\nwell, they are taking longer than originally forecast. The National Environment\nManagement Agency has requested that additional community consultation take\nplace for the Environmental and Social Impact Assessments which will now be\nsubmitted in the second half of 2019.<\/p>\n\n\n\n
All parties continue to work well\ntogether across all development workstreams and significant progress has been\nmade so far this year. The joint venture partners and the Government of\nKenya are reviewing the most likely timeline to FID which is now expected in\n2020.<\/p>\n\n\n\n
The partners also report\nsignificant progress has been made on the Early Oil Production Scheme\n(EOPS). In May 2019, EOPS production was increased from 600 bopd to 2,000\nbopd and the reservoirs, wells and associated facilities have been performing\nwell. Over 150,000 bbls of oil have been safely delivered to Mombasa so far and\nTullow Oil plc expects the first export cargo to be sold and lifted in the\nthird quarter of 2019.
<\/p>\n\n\n\n
The Heads of Terms Agreements were signed today at the Ministry of Petroleum & Mining in Nairobi by Hon. John Munyes, Cabinet Secretary for the Ministry of Petroleum and Mining, and Kenya Joint Venture Partners led by Martin Mbogo, Managing Director, Tullow Kenya. <\/p>\n\n\n\n
Africa Oil Corp. has a 25% working interest in Project Oil Kenya with Tullow Oil plc (50% and Operator) and Total S.A. (25%) holding the remaining interests.<\/p>\n","protected":false},"excerpt":{"rendered":"