Tullow plans to invest $10mn in Kenya's oil project

Global independent oil and gas exploration and production firm, Tullow Oil PLC, reaffirms its commitment to enhancing the development of Project Oil Kenya this year. Tullow plans to allocate approximately $10 million towards appraisal engagements for Project Oil Kenya, focusing on refining the Field Development Plan and related local operations. In a recent interview with Kenya's Cabinet Secretary of Energy and Petroleum, Davis Chirchir, key insights were shared regarding the progress and future plans for the project. The project in Kenya is currently in the production sharing contract's final phase, known as the field development plan. The submitted report is undergoing scrutiny to assess the technical and commercial viability of extracting around 121 to 130 barrels per day. The regulator, IEPRA, is actively studying the report and is expected to present its findings to the executive through the Ministry of Energy within the next 30 days. Subsequently, the report will be presented to parliament, setting a timeline for confirming the commercial and technical feasibility of oil extraction. Once the viability is confirmed, Tullow Oil PLC envisions a potential investment of up to $5 billion to establish the necessary infrastructure for oil extraction and transport to the market. The significant investment demonstrates Tullow's long-term commitment to the project and the region's oil industry. Amidst the ongoing global energy transition, traditional oil investors are becoming increasingly hesitant towards investing in the sector due to concerns about climate change. Chirchir highlighted the importance of risk capital in oil exploration and production, emphasizing the need for partnerships to mitigate financial risks associated with exploration activities. Tullow Oil's strategy involves bringing in partners to share the risks and ultimately reach a final investment decision. The conversation around energy transition and climate change raises questions about how developing countries like Kenya can balance economic development with environmental sustainability. Chirchir pointed out the significant progress made in renewable energy technologies, specifically mentioning the decreasing costs of solar, wind, and geothermal power generation. He highlighted Kenya's success in incentivizing renewable energy projects through policies like feeding tariffs, which have contributed to the country's energy mix and economic growth. Addressing the recent challenges faced with rising fuel prices globally, especially in the wake of geopolitical tensions and the COVID-19 pandemic, Chirchir acknowledged the impact on inflation rates and government subsidies to stabilize the situation. He noted that the easing of oil prices indicates a path towards recovery and encouraged a shift towards renewable energy sources like electric cars as a long-term solution. In conclusion, Tullow Oil PLC's investment in Kenya's oil project signifies a strategic approach to navigate the complexities of the energy transition while driving economic development in the region. By leveraging renewable energy technologies and fostering partnerships, the project aims to contribute to sustainable energy practices and address the challenges posed by climate change in the global oil industry.