Gulf Energy Ltd., a Nairobi-based oil and gas trader that acquired Tullow Oil Plc’s crude discoveries in Kenya, plans to start production next year following initial government approval of its field development plan, according to a top official.
Tullow agreed to sell the assets to the local firm in April for $120 million after more than a decade of attempts to develop the finds, as it focuses on paying down debt. Kenya’s regulator required a field development plan from the buyer for the deal to proceed, and Tullow received the first $40 million tranche in September.
Kenya gave initial approval for Gulf Energy’s plan for the South Lokichar project, Cabinet Secretary for Energy Opiyo Wandayi confirmed. “I will be forwarding the approved FDP to Parliament for ratification,” he said.
After the plan is ratified, the contractor will start the project and investments will be outlined, Wandayi said. “First oil is expected by December 2026.”
The development marks a significant milestone for Kenya’s oil sector, which has faced numerous delays and challenges in bringing discovered resources to production. The South Lokichar project represents Kenya’s most advanced oil development opportunity, and Gulf Energy’s commitment to moving forward quickly could finally unlock the country’s petroleum potential.
Source: worldoil.com, Bloomberg