Background

The South Lokichar basin(Blocks 10BB and 13T in Kenya) was first explored by Shell in the early 1990s. Shell announced the Loperot discovery in 1992 and recovered small amounts of oil. The discovery was considered marginal and all exploration work was abandoned.

Brief Introduction

Location of oil field:Blocks 10BB and 13T in the South Lokichar basin , Kenya.
Oil field reserves:Tullow estimates that the South Lokichar basin contains the following recoverable resources: 240 – 560 – 1,230 mmbo (1C–2C–3C) from an overall discovered STOIIP of up to 4 billion barrels.
Exploration and development history:
In 2010, Tullow acquired 50% interest in licences across five onshore blocks.
In 2011, Full Tensor Gravity Gradiometry(FTG) seismic survey commenced by Tullow.
In 2012, the Ngamia-1 well successfully encountered over 200 metres of net oil pay, the second East Africa onshore tertiary rift basin opened by Tullow. Discovery at Twiga South-1 well in Block 13T.
In 2013, Discovery at Etuko-1 well in Block 10BB and Ekales-1 well, Agete-1 well in Block 13T.
In 2014, Discovery at Amosing-1 and Ewoi-1 in Block 10BB and Etom-1 in Block 10BB, by Tullow.
In 2014, found oil and gas at the Ngamia-2 well, by Tullow.
In 2014, 3D seismic surveys over an area of 550 square kilometers in Kenya’s Block 10BB and 13T completed by September.
In 2015, Acquisition of 951 sq km 3D seismic surveys completed over discoveries in the South Lokichar Basin, by Tullow.
This has since been followed by further exploration success in the South Lokichar Basin at the Amosing, Twiga, Etuko, Ekales-1, Agete, Ewoi, Ekunyuk, Etom, Erut and Emekuya oil accumulations.
Existing equipment and facilities:
A total of 21 appraisal wells have been drilled in the South Lokichar basin, six appraisal wells at the Amosing field, ten at Ngamia, three at Etom and two at Ekales.

Change of rights and interests

Africa Oil Corp and Tullow were 50-50 partners in blocks 10 BB and 13T.
In 2015, Maersk Oil acquired 25 per cent of the promising northern Kenya exploration licences from Africa Oil Corporation.
Now Africa Oil Corp(AOC) has a 25% working interest in Blocks 10BB and 13T with Tullow Oil (50% and Operator) and Maersk Olie og Gas (25%) holding the remaining interests.

Expected workload

The initial stage is planned to include 210 wells through 18 well pads at Ngamia and 70 wells through seven well pads at Amosing, with a planned plateau rate of 60,000 to 80,000 bopd. Initial injectivity testing has started at Ngamia-11 and oil production and water injection facilities are being constructed in the field ready to commence production/injection in the first quarter of 2018. Total gross capex associated with the Foundation Stage is expected to be $2.9 billion, of which $1.8 billion is investment in the upstream and $1.1 billion is for the pipeline by Tullow.
In 2016, Kenya started a search for companies to design a crude oil export pipeline costing some $2.1 billion and which it expects to be should be completed by 2021.It is anticipated that Front End Engineering and Design (FEED) for the initial stage will commence in 2018. Tullow expected to reach a final investment decision (FID) on the project in 2019 and first oil production by 2021-22.

Company behavior

In 2016,Tullow had announced it had reached an agreement with the Government of Kenya to extend the exploration period for Blocks 10BB and 13T in South Lokichar to 18 September 2020 with the earlier extension set to expire in July and September 2017.
In 2016, government of Uganda and Kenya announced their decision to develop separate, standalone export pipelines for their oil resources.
In 2017, Africa Oil and its partners aimed to announce a final investment decision for production.
In 2017, an agreement between the Joint Venture Partners and the Government of Kenya was signed allowing all Early Oil Pilot Scheme(EOPS) upstream contracts to be awarded.
Africa Oil intends to have an updated independent resource evaluation in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ('NI 51-101') completed following the completion of the water injectivity and associated production testing planned for the first half of 2018.
In April 2018, Kenya’s National Oil Corporation and U.S. oil services company Schlumberger had agreed to finalize a field development plan on behalf of the government for the blocks in the northwest of the country.