UPDATE 2-Kenya-Uganda could pipe 0.5 mln barrels of oil per day - Tullow

Wed Jul 31, 2013 6:54am EDT
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* Etuko-1 makes Kenya Lokichar Basin commercially viable

* Kenya resource volume estimate raised to 300 mln barrels

By Andrew Callus

LONDON, July 31 (Reuters) - Tullow Oil said a new drilling success at the Etuko-1 well in Kenya confirms the commercial value of fields there and predicted a pipeline picking up Ugandan crude too could deliver 500,000 barrels a day of new output.

That amount - probably delivered to the east-coast port of Lamu near the border with Somalia - would boost sub-Saharan African output by 8 percent, from around 6.2 million barrels now. It is equivalent to all the lost production from troubled top exporter Nigeria over the past three years.

Tullow has said in the past it hopes to see a 250,000-barrels-a-day pipeline from Uganda's Lake Albert region, where the company is also drilling, with a view to first deliveries by 2018. It has also raised the possibility of a tie-in to its Kenyan prospects.

In June, Uganda's President Yoweri Museveni and Kenyan President Uhuru Kenyatta agreed to cooperate on a pipeline route that could also eventually ship oil from South Sudan.

The Etuko-1 result, added to two other wells, raises Tullow's estimate of resource volumes in the Lokichar basin in Kenya's northwest to 300 million barrels from 250 million.

A Kenya-Uganda pipeline with a total length of 1,300 to 1,400 km (800-870 miles) could be a reality "at a similar date (2018)", said Paul McDade, the company's chief operating officer.   Continued...