Drill more oil wells before production starts, Tullow told

A Tullow exploration site in Turkana. The government wants British oil explorer, Tullow Oil Plc, to drill more exploration wells before production can start. PHOTO/FILE  NATION MEDIA GROUP

By IMMACULATE KARAMBU 

In Summary

• On Wednesday, Tullow raised its oil estimates for Kenya by 20 per cent to 300 million barrels, saying that the discovery made to date meets the threshold for commercial exploitation of the resource.

The government wants British oil explorer, Tullow Oil Plc, to drill more exploration wells before production can start.

The demand comes just a day after the UK company released its half-year report indicating that it will start negotiations with the government over mechanisms to begin producing Kenya’s oil resources.

However, in a telephone interview with the Saturday Nation, Mr Martin Heya, commissioner for petroleum at the ministry of Energy said that the agreement between the government and Tullow is that the multinational drills several other exploration wells before any talks on the production of the resource can begin.

“Tullow needs to drill a certain threshold of wells. You cannot start producing oil from just two wells. We have agreed with them that they need to drill more wells before production,” said Mr Heya.

On Wednesday, Tullow raised its oil estimates for Kenya by 20 per cent to 300 million barrels, saying that the discovery made to date meets the threshold for commercial exploitation of the resource.

“Resources developed to date are of a scale that the partnership will initiate discussions with the government of Kenya and other relevant stakeholders to consider development options,” the statement accompanying the company’s half-year financial results noted.

At the moment, the Energy ministry expects Tullow to increase the number of exploration rigs in Kenya from the current two to five by the end of this year, an indication of the work ahead for the company before commercial exploitation can begin.

The firm made the commitment to increase its number of rigs at a meeting with officials of the ministry of Energy and Petroleum where it also presented a $400 million budget it intends to spend to finance its operations in Kenya.

Tullow has also discovered commercially viable quantities of oil in Uganda but it is yet to start production as it awaits setting up of the necessary infrastructure to facilitate transportation of crude oil.

In Uganda, Tullow has drilled over 50 wells, an indication that it may require to meet the threshold in Kenya before production can begin.