Gulf Energy has affirmed its commitment to invest Ksh. 774 billion (approximately $6.1 billion) to develop the Turkana oil project over a 25-year contract period. This commitment follows the firm’s acquisition of the project from Tullow Oil for $120 million in late 2025.Â
Gulf Energy aims for “First Oil” by December 2026, starting with 20,000 barrels per day (BPD) and eventually ramping up to 50,000 BPD.
The South Lokichar Basin holds an estimated 560 million barrels of recoverable oil across blocks T6 and T7.
The initial phase will rely on road and rail transport to Mombasa rather than the previously planned $1.5 billion pipeline to Lamu, a move intended to reduce immediate costs.
The government has secured water supply via a 105-kilometre pipeline from Turkwel Dam and is finalising a security framework for the oilfields as of February 2026.Â
Â
To ensure the project’s viability, the Kenyan government and Gulf Energy signed an addendum with significant fiscal concessions:Â
85% Cost Recovery: Gulf Energy can recover up to 85% of annual revenue to pay back initial investments before profit sharing begins, an increase from the 65% cap in previous contracts.
After costs are recovered, profits will be split 50/50 between the firm and the state for the initial phase.The firm and its subcontractors are exempt from VAT, Railway Development Levy, Import Declaration Fee, and Withholding Tax on petroleum services.
By Anthony Solly
