Why Kenyan crude will be exported and not domestically refined

Mombasa refinerySource: http://mygov.go.ke/national-treasury-sets-aside-funds-to-buy-essar-stake-in-refinery/ Kenya currently has no crude oil production and relies solely on imports to feed the domestic refinery in Mombasa. Aside from feedstock for the refinery, there is no other demand for crude oil in Kenya. In 2012, domestic consumption of refined products was 73mbbl/d – this was satisfied by 20mbbl/d of domestic production from the...

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Lundin stops funding Africa Oil

Africa Oil’s history dates back to 1983, when it was founded as Canmex Minerals with funding from the Lundin family. The company was officially renamed to Africa Oil in June 2009 to reflect its strategic and geographic focus. Since 2009, the company went through a series of acquisitions to consolidate its position in Kenya and Ethiopia...

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Pricing Kenyan crude

The price a crude fetches is typically against a benchmark such as Brent, WTI or Urals and the underlying crude marketing agreement will detail the calculation of the premium or discount to such a benchmark as well as other adjustments. As Kenyan crude has never been marketed before, there is no established pricing for Lokichar crude – however, a hypothetical value can be calculated. One of the key determinants of crude pricing is crude quality...

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Battle of the routes

Significant resources have been discovered in East Africa with 1.7bnbbl lying in Uganda and 600mmbbl in Kenya. The key barrier to monetising the vast amounts of oil is an export pipeline. In 2010, when Tullow acquired Heritage’s acreage, first oil was envisaged for 2016. Over the last five years, this timing has slowly crept back with estimates now pushed back to late-2019 despite government PR continuing to promote first oil in 2016-17. There...

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