Tullow Oil has redesigned its crude oil development project in Kenya that will see the company invest an additional Kshs. 340 billion.
The company says the increase in the expected capital expenditure is due to additional wells to be drilled and larger diameter crude oil export pipeline.
Tullow Oil started operations in Kenya in the year 2010 and in early 2012, announced that it had struck crude oil in Turkana.
The company has been in the market scouting for a strategic investor and hopes to seal such a deal before the Final Investment Decision is submitted to the government, before the end of this year.
In its first half investor briefing, the company says it plans to produce about 585 million barrels of crude oil in Kenya.
Tullow Oil says the additional investment of Kshs. 340 billion will be used to develop its upstream activities as well as the pipeline between Turkana and Lamu.
“The increase in capex from the previous design is due to a bigger facility processing capacity, additional wells to be drilled and larger diameter crude oil export pipeline, which delivers 30% increase in resources whilst lowering the unit cost to 22 dollars per barrel from the previously 31 dollars per barrel,” Tullow said in a statement.
It says the revised development concept allows greater flexibility in adding oil fields into production without significant modifications to the project’s infrastructure.
The firm has announced that the 825-kilometre pipeline that will transport the crude oil from Turkana to the port of Lamu will be heated and buried to avoid any disruption is the long-term.
Further, Tullow Oil plans to carry out more exploration drilling in the Blocks 10BB and 13T licences as well as exploring potential in Blocks 10BA and 12B.