Kenya’s long-delayed oil ambitions are finally shifting from paperwork to pipeline as Gulf Energy has acquired a $15 million onshore drilling rig for the South Lokichar Basin — the country’s most commercially promising oil province — and is targeting first oil production before the end of 2026.
The GW70 onshore rig, secured from Great Wall Drilling Company in the United Arab Emirates under a long-term lease, is expected to arrive in Kenya before the end of March 2026. Its acquisition comes just months after Gulf Energy received approval for its Field Development Plan in November 2025, outlining a multi-phased development of six discoveries in the Turkana County basin.
Phase one of the project targets production of 20,000 barrels per day (bpd), with a second phase designed to scale output to 50,000 bpd by 2032. The South Lokichar Basin holds estimated recoverable reserves of approximately 560 million barrels, with Gulf Energy targeting 326 million recoverable barrels over a 25-year contract period.
The rig acquisition signals a decisive move from planning to execution. The lease arrangement is performance-based, tying operational compensation to delivery metrics and embedding a skills-transfer component for Kenyan personnel — a condition aimed at strengthening local technical capacity as the project scales.
The economic implications are substantial. Government projections estimate cumulative state revenues ranging from $1.05 billion at $60 per barrel to $2.9 billion at $70 per barrel over the project’s lifespan. A $10 per barrel increase alone translates to an additional $1.85 billion over the lifecycle.
Initial crude will be transported by truck to Mombasa, with a planned 892-kilometre export pipeline connecting the field to international markets. Once operational, South Lokichar will become Kenya’s first commercial oil project and is expected to rank among the country’s top export earners, complementing agriculture and tourism while transforming infrastructure and livelihoods in Turkana County.
Source: energycapitalpower.com