Tullow Oil suspends Kenyan oil-export program

JOHANNESBURG (Bloomberg) - Tullow Oil’s export and testing of Kenya’s crude under a pilot plan ended June 2, as timelines for development in the East African nation slowed.

The contract for trucking crude from northern Kenya to Mombasa city at the coast for shipment expired after running for two years. The project “allowed Kenya’s oil to be marketed and established on world markets,” the company said in a statement.

While Tullow is confident the so-called Early Oil Pilot Scheme will help prepare the partners in moving to full field development, progress has slowed. It is unlikely a final investment decision will be reached in Kenya this year as earlier anticipated, according to Tullow, which is now focused on managing debt after a plunge in oil prices.

The plan was to ship about 500,000 barrels. There are about 185,000 barrels in Mombasa that haven’t been exported, Tullow Kenya Managing Director Martin Mbogo said by phone. “The decision on the way forward on the stored crude is subject to discussions between the government and joint-venture partners,” he said.

The Kenya pilot oil project encountered delays following protests and heavy rains that damaged roads, leading to the suspension of trucking in the fourth quarter. Last month, the company also declared a force majeure on blocks due to the coronavirus pandemic.