British firm Tullow Oil has up to December 2021 to present an investment plan for oil production in Turkana County.
The oil firm discovered oil in the Lokichar basin of Turkana in 2011, but has not developed the field for commercial production.
The delay has since put the government to task over prolonged petroleum wealth benefits.
Should the company fail to provide the plan, the company risks losing concession on two exploration fields in the area.
Petroleum and Mining Principal Secretary Andrew Kamau said yesterday the December deadline will chart the government’s way forward on the matter.
Tullow oil has previously underlined fluctuating global oil prices, and approval delays for land and water rights. The company also pegged a tax dispute as part of the challenges the oil firm is facing.
“Tullow and its joint venture partners expect to complete a revised assessment of the project by the second quarter of 2021. One of the conditions requires the Group to submit a technically and commercially compliant Field Development Plan (FDP) with the Government of Kenya by December 31, 2021. If the FDP is not submitted by December 31, 2021, the extension period will expire on December 31, 2021.” the firm said.
The investment plan would dictate Kenya’s final decision on whether to allow Tullow and its partners to proceed with the development of the Kenyan oil project next year.
When a firm first wins an oil license, it is typically given a number of years of exclusive rights to explore. If it is successful and finds oil, its exploration permit usually entitles it to subsequently receive a production authorization for the area, which could last up to 30 years.
Kenya agreed to extend Tullow’s licenses after intense negotiations between May and August 2020.
