In April 2016, it was agreed by the Governments of Uganda and Kenya that the two countries would develop separate, standalone export pipelines for their oil resources. Tullow welcomes the clarity and certainty that this decision brings.
Good progress is being made on the Kenya development project with preparation for the upstream development Front End Engineering Design (FEED) well under way. The negotiation of a Joint Development Agreement (JDA), setting out a structure for the Government of Kenya and the Kenya Joint Venture Partners to progress the development of the export pipeline, was concluded in October 2016, with execution of the JDA expected before year-end. The JDA will allow important studies to commence such as FEED, Environmental and Social Impact Assessments (ESIA), as well as studies on pipeline financing and ownership.
An Early Oil Pilot Scheme (EOPS), which involves the transportation of early South Lokichar oil production to Mombasa by road, has been sanctioned by the Joint Venture Partners. The EOPS will use existing upstream wells and oil storage tanks to initially produce approximately 2,000 bopd gross in mid-2017. This early pilot scheme will provide important information to assist in full field development planning.
Tullow entered Kenya in 2010, after signing agreements with Africa Oil and Centric Energy to gain a 50% operated interest in five onshore licences; 10BA, 10BB, 10A, 12A and 13T. In 2012, Tullow farmed in to onshore Block 12B with 50% and increased its interest in Block 12A to 65%. Since then our interest in Block 10A has been relinquished and in October 2015, Tullow farmed-out 25% of its interest in Block 12A to Delonex.