RPT-Kenya edges towards oil production, hurdles remain

Thu Jan 16, 2014 3:10am EST
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* Tullow says Kenya has 600 million barrels of oil

* Exports depend on $4 billion pipeline project

* Flows through pipeline could start in 2019

By Edmund Blair

NAIROBI, Jan 15 (Reuters) - Tullow Oil's two new finds have moved Kenya closer to oil producer status but reaching that milestone requires developing fields in a remote region, constructing an export route and building local skills in a nation new to the business.

Britain's Tullow has doubled its estimate of discoveries to 600 million barrels in the Lokichar basin, an arid corner of the east African nation, which wants to put itself at the centre of a regional oil boom in the making.

There is probably much more oil there. Consultancy Wood Mackenzie says two onshore basins in Kenya and Uganda could have more than 4 billion barrels in addition to Kenya's existing reserves and the 1.6 billion already found in Uganda.

Even before Kenya's latest finds, Tullow said the two nations could produce 500,000 barrels per day, which would boost Sub Saharan output by 8 percent from current levels of around 6.2 million bpd.   Continued...