Page 11 - AfrOil Week 08 2020

AfrOil POLICY AfrOil
 In the latter state, drivers and motorcyclists were reportedly queuing up for miles, as filling stations in the towns of Suakin and Port Sudan did not have enough gasoline or diesel to meet demand.
In Kassala, fuel shortages led the local arm of the General Transportation Union (GTU) to stage a strike that led to the shutdown of all
forms of public transport over the weekend. Union members staged the work stoppage in a bid to force local authorities to raise ticket prices, arguing that this move was necessary because of the difficulty of obtaining adequate fuel.
As of press time, no word was available on the central government’s response to continued shortages and protests outside Khartoum. ™
PROJECTS & COMPANIES
Tullow Oil remains optimistic about Kenyan project
KENYA
MARTIN Mbogo, the managing director of Tullow Oil’s Kenyan division, said last week that he remained optimistic about the company’s plans for development of three licence areas in theSouthLokicharBasin.Thesesitesareknown as Blocks 10 BA, 10BB and 13T.
In an interview with the Daily Nation, Mbogo said he expected Tullow (UK/Ireland) to make a final investment decision (FID) on the Kenyan project as scheduled in late 2020. “We are confident that this will be done in the last quarter of this year once we have every moving part of this project aligned,” he said.
At the moment, he stated, Tullow is working to secure KES300mn ($2.97mn) in financing to launch work at its licence areas. The com- pany intends to use these funds to help cover the costs of drilling 300 new wells in order to push production up to 80,000-100,000 barrels per day (bpd) and is building a 900-km pipeline to pump oil to terminal facilities on the coast, he said. It will finance 30% of this sum through equity and the remaining 70% through loans, he stated.
Securing the project financing will be con- tingent on “due diligence, which will involve our ability to access land for the project both upstream and downstream, and also water rights for the project in Turkwel,” Mbogo said. He added: “So far, the National Land Commis- sion has taken a lead on the land acquisition issues and also water. Once we have all these aligned and the project partners signed in, then we can confidently undertake the FID.”
In the meantime, he said, Tullow and its partners have already taken the steps needed to launch the early oil production scheme (EOPS), which provides for oil from the South Lokichar Basin to be moved to Mombasa by truck. They have drilled 40 wells and made the arrange- ments needed to support ongoing road ship- ments, he said.
He acknowledged, though, that the company had been forced to suspend EOPS deliveries two months ago. “This has to do with the state
of the roads. We have a section between Ortum and Sarbit where the roads aren’t [drivable],” he explained. “Regrettably, that hasn’t been resolved. We are happy to resume the EOPS whenthoseroadsarefixedbythegovernment.”
Tullow has incurred additional costs because
of the slow pace of road repair, he added. “Obvi-
ously, this delay comes at a cost, because we
have retained leased equipment, prime movers, tank-tainers and professionals,” he said. “We are having conversations with the government on
how much longer this situation will hold and
any alternatives for the project.” 
The South Lokichar blocks are in western Kenya (Image: Tullow Oil)
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