Tullow Oil Plc expects to spend $280 million on crude exploration in Kenya and Uganda in 2018.
Tullow’s chief executive officer Paul McDade said $170 million will be spent on exploration, appraisal and predevelopment of crude oil resources in Turkana, northwestern Kenya. The money is less than the $225 million that had been announced earlier.
Tullow’s 2018 capital expenditure is about $460 million, excluding $110 million which will be repaid on completion of farm-downs (sale of equity) in the Albertine Basin in Uganda in the first half of the year.
The sale of equity in Uganda to Total and China National Offshore Oil Corporation (CNOOC) is waiting government’s approval.
“In line with its post-transaction status, Tullow has been reducing operational footprint in Uganda and is fully prepared for a non-operated presence only,” he said.
Tullow, Africa Oil Corporation of Canada and Maersk Oil of Norway have discovered 750 million barrels of crude oil in South Lokichar basin in northwestern Kenya.
Total SA of France, CNOOC and Tullow have jointly found six billion barrels of crude oil in the Albertine Basin in western Uganda near the border with the Democratic Republic of Congo.
Mr McDade said focus in South Lokichar was now on early oil pilot scheme and the overall development plan for the discovered resources.
Work is under way on early oil pilot scheme with testing commencing on Ngamia-11 well and facilities like water injection being constructed.
“Oil produced will initially be stored until all necessary consents and approvals are granted and work is completed for the transfer of crude oil to Mombasa by road,” said Mr McDade.
He said Tullow had reengaged Kenya on timelines for progressing development of commercial output of crude in South Lokichar basin. Environmental and social impact assessment for field development is set to start by April.
Front end engineering design and environmental and social impact assessment is ongoing for Albertine production facilities with a crude oil pipeline from Hoima in Uganda to Tanzania’s Tanga port.