Tullow Oil has invited bids from trucking companies interested in transporting the commodity from the oil fields in Turkana to the Port of Mombasa as Kenya’s ambitious plan to commence oil exports by mid-next year begins to take shape.
And in a move that signals the company’s strategy to avert local conflicts when the lucrative exports kick off, the UK headquartered exploration and production company’s call for expression for provision of road transportation for crude oil says the company that would be given the job would need to have adequate local representation.
It, however, did not specify what it would deem as a satisfactory level of local representation, only noting that the company would need to have a ‘high level of local content’.
“Companies interested in supplying this service must be committed to delivering a high level of local content through subcontracting in the area of operation as well as support capacity building through provision of a driver training programme,” said Tullow Oil in the Expression of Interest that run in the local dailies Friday.
The interest in having a ‘high level of local content’ is on the back of criticism in the past that multinationals ship in expatriate workers even in instances where capacity is available locally. It is also against a requirement by Government to have such companies transfer knowledge to Kenyans, especially in instances where there is limited capacity in the Kenyan market.
The company that Tullow will recruit is expected to oversee the movement of crude oil in the preliminary phase of oil production. During this phase, the firm plans to move about 2, 000 litres of crude to Mombasa. The oil will be stored at the Kenya Petroleum Refineries from where it will be exported.
Other than the logistics company, Tullow also said it would also lease special insulated container tankers with a capacity for 25, 000 litres that would be used for transporting crude to Mombasa.
“The scope of work entails trucking of crude oil in insulated containers to be provided by the Company from an Early Production Facility (EPF), located near Lokichar in Turkana County, to storage at the Kenya Petroleum Refineries in Changamwe, Mombasa,” said the company.
According to Bloomberg, the preliminary stage is designed to help the government and Kenya joint-venture partners better understand the technical and logistical requirements of oil production ahead of full field development.
“It’s a pilot scheme ahead of full development to help the government of Kenya and the Kenya joint-venture partners better understand the technical and logistical requirements of oil production,” it quotes Tullow spokesman George Cazenove as saying in response to e-mail questions the agency sent to him.
Tullow estimates that there are upwards of 750 million barrels of recoverable oil in the Lokichar Region of Turkana County. It however says these will reach one billion barrels with the drilling of more exploratory wells.
The company expects to start exporting crude oil in June 2017. This, however, seems to be rushed and concerns have been raised that with inadequate infrastructure, including a pipeline linking the oil fields of Turkana to an export hub such as the Kenyan coast, the business would be running at a loss.
A civil society group – Kenya Civil Society Platform on Oil and Gas (KCSPOG) – earlier this week warned that the early oil trade will run at a Sh3 billion loss.
