Kenya aims to start exporting crude oil by the end of 2026

Published: 2025-06-10 13:01:08 ET TLW.L

Published on 06/10/2025 at 13:01

Key takeaways

The Kenyan government has set a goal to begin exporting crude oil by the end of 2026. This ambitious goal depends on the successful commercial production of crude oil in Turkana's South Lokichar fields by Gulf Energy Ltd. (Kenya).

This target date is a shift from previous projections, which were for exports starting in 2028 because of financial and partnership issues. Gulf Energy Ltd. is finalizing the acquisition of Tullow Oil's assets and the crucial Field Development Plan (FDP) has yet to be approved. Initial production is expected to be between 60,000 and 100,000 barrels per day, extracting an estimated 560 million barrels over a 25-year period.

The initiative is designed to allow Kenya to become a major player in the world oil market, using the estimated reserves of 560 million barrels. However, the Kenyan National Assembly has raised concerns about transparency surrounding the sale of assets from Tullow Oil to Gulf Energy Ltd. worth Ksh15 billion (€100 million), highlighting possible implications for Kenya's oil aspirations.

Despite these concerns, the acquisition is reportedly nearing completion, allowing Gulf Energy Ltd. to take operational control. While the estimated recoverable oil is 560 million barrels, the initial Oil in Place (OIP) could potentially reach 4 billion barrels, although only a portion is recoverable.

Importance of FDP approval

FDP approval is a crucial milestone, requiring confirmation of financial and technical resources before moving forward. This stage has a major impact on the projected 2026 timetable.

CS Opiyo Wandayi stressed the importance of a thorough review before approving the FDP, stating that this would pave the way for the commercial phase and first oil exports from Turkana by the end of 2026. The Energy and Petroleum Regulatory Authority (EPRA) plays a central role in overseeing this process and guiding the project to the final investment decision (FID).

Kenya's journey to oil export has been marked by challenges over the years. In August 2019, a pilot export of 240,000 barrels took place under the Early Oil Pilot Scheme (EOPS), with an initial production target of 120,000 barrels per day. However, funding problems and the withdrawal of key partners such as TotalEnergies and Africa Oil in 2023 led to setbacks.

CS Wandayi's optimistic outlook is boosting expectations; however, the decision not to build a refinery because it is not profitable to refine current deposits adds complexity to the project.