February 19, 2019 / 6:53 AM / 8 months ago

Kenya says present crude oil capacity insufficient for refinery

NAIROBI, Feb 19 (Reuters) - Crude oil deposits so far discovered in Kenya are insufficient to allow for the building of a refinery, a senior petroleum ministry official said on Tuesday.

Kenya, which currently exports no crude, discovered commercial oil reserves in its Lokichar basin in 2012 and Tullow Oil estimates the basin to contain an estimated 560 million barrels in so-called 2C proven and probable oil reserves.

Tullow has said this would translate to 60,000 to 100,000 barrels per day of gross production.

It is proven the world over that a refinery would make money only when it has a refining capacity of at least 400,000 barrels a day, Andrew Kamau, principal secretary at the petroleum and mining ministry, told reporters.

“And we have 80,000 barrels a day, so where are we going to make money on that? We can import cheaper from India,” the official said.

Other partners in the blocks with crude oil discoveries are Africa Oil Corp and Total.

Last week, Tullow said it expected commercial framework agreements from the government and deals over land acquisition for a 800-km pipeline and oilfield infrastructure in the first quarter. (Reporting by Omar Mohammed; Editing by George Obulutsa and Subhranshu Sahu)

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