Kenya: 80,000 barrels per day not sufficient to construct a refinery

Kenya to Export Second Batch of 500,000 Barrels of Crude oil in Feb. 2020

Antony Mwangi Tullow Oil GPA & Communications Director (far right) Donald Mahaga General Manager Africa oil, Andrew Kamau Principal Secretary in the State Department of Petroleum, Ministry Of Energy and Petroleum, Purity Karau Total E&P International K2 limited In-Country Manager

Kenya has opted not to construct an oil refinery to process its crude oil from Turkana because it is insufficient, according to Andrew Kamau, Principal Secretary at the Petroleum and Mining Ministry.

“This is a business. It is not a social project. Crude oil production is a business so what is the best interests to the country from a business point of view: is it building a refinery? We have got 80,000 barrels per day so where are we going to make money on that? We can import cheaper from India,” said the PS.

According to Kamau, “For a refinery to be in business, for it to make money, it has to process at least 400,000 barrels of petroleum per day.”

“Early Oil project is not a commercial venture, it’s about finding out exactly what are the requirements from a logistical point of view and a social point of view on what we will need to produce full field,” said  Kamau.

Kenya will construct an 821km pipeline connecting Lokichar oilfields in Turkana to Lamu port with projections of it being completed by 2022.

Martin Mbogo, Tullow Oil Kenya Managing Director said,  “We will be pushing 80,000 every day of the week, assuming the price of $50 per barrel – today it is upwards of $60 a barrel – and that number will get to $1.5 billion.”

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Mbogo said that the development phase of the oilfields will cost KSh300 billion.

The amount, KSh110 billion will be set aside for the pipeline and the remaining will be used in developing close to 300 oil wells and setting up a central processing facility.