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Tullow Oil is aiming to take a final investment on development of its South Lokichar basin assets in Kenya next year as the Anglo-Irish independent released resource estimate figures.
The London-based player said best estimate contingent recoverable resources in the basin are 560 million barrels of oil, with a low figure of 240 million barrels and a high of 1.23 billion barrels of oil.
The stock tank original oil-in-place estimate is pegged at up to 4 billion barrels of oil, Tullow said on Wednesday.
Chief executive Paul McDade said: “The assessment of the results from our appraisal campaign in Kenya also fully supports progress towards a major development of the South Lokichar basin.”
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The company is eyeing a phased development plan, with project sanction on the initial phase seen next year and first oil in 2021 or 2022.
Mark MacFarlane, vice president for Tullow’s East Africa operations, said the company will formulate “a prudent and flexible plan of execution” in Kenya.
The operator has drilled a total of 21 appraisal wells in the South Lokichar basin.
“This estimate of recoverable resources is consistent with previous guidance provided during the exploration and appraisal phase (Pmean of 750 million barrels of oil).
“The additional remaining conventional undrilled prospect inventory of the basin is approximately 230 million barrels of oil risked mean recoverable, not including further potential in tight-oil plays in the future.”
Tullow and the government are angling for the Amosing and Ngamia fields to be developed as the foundation stage of the basin’s development.
This first stage is set to include an initial 210 wells through 18 well pads at Ngamia and another 70 wells through seven pads at Amosing.
“This stage will target volumes of around 210 million barrels of oil of the total estimated 2C resources of 560 million barrels of oil and a plateau rate of 60,000 to 80,000 barrels per day of oil,” Tullow said.
“The incremental development of the remaining 2C resources and the significant upside potential is expected to increase plateau production to 100,000 bpd or greater.”
Front-end engineering and design as well as the baseline environmental and social impact statements are seen beginning in the second quarter this year.
Total gross capital investment for the initial stage is seen at $2.9 billion, with $1.8 billion of this in the upstream and $1.1 billion on an export pipeline to Lamu on the Kenyan coast.
The initial stage will also involve a central processing facility (CPF) of between 60,000 and 80,000 bpd of capacity.source:Upstreamonline