Kenya will seek to market crude oil deposits to global financiers since the government no longer offers sovereign guarantees.
Shell Kenya Country Manager Brian Muriuki says 70 per cent of the project is expected to be financed through debts from international markets and 30 percent through equity financing.
Crude oil reserves, discovered in 2012, are estimated at 560 million barrels with Tullow Oil owning a 50 per cent stake in the project, while its partners, Canada’s Africa Oil Corp and Total, each hold 25 percent.
So far, it is estimated that over 200 billion shillings has been invested in the project. Kenya has been in talks with financiers for a heated pipeline between Lokichar and Lamu.
Muriuki says the heated pipeline could be financed through project financing obtained from leading banks as well as equity capital.
In June, Kenya signed the heads of terms agreement with Tullow, Total and Africa Oil, specifying the obligations of each party and investments required for commercial production.
The revenue sharing agreement between Kenya and the oil companies has not been disclosed publicly with Muriuki stating that it is still a process which is yet to be finalized.
Turkana community leaders have been pushing for a percent of the oil revenues, plus a monthly stipend for each family affected by oil operations.
Laying of the heated pipeline and oil facilities are estimated to take about 36 months, with experts projecting that Kenya will likely start commercial crude oil production in the year 2023.