Early Oil Pilot Scheme is a key strategic project under the vision 2030 development blueprint that involves exploiting and marketing its oil in small scale in order to test the market, expected to start by mid-2017 until mid-2019. This program was as a result of Tullow Oil exceptional oil discovery in Lokichar, Turkana, in April 2012.
Oil and Gas Life Cycle: Where Early Oil Pilot Scheme comes in
This phase involves the search for oil and gas reservoirs by geologists and geophysicists, by seismic surveys (surveys that produce detailed images of the various rock types and their location beneath the Earth's surface and they use this information to determine the location and size of oil and gas reservoirs).
In this phase, additional information about the field is collected by drilling and testing wells. It is then decided whether the field will be developed or not. An initial well is drilled and after a discovery, appraisal wells are drilled and potential additional exploration wells also, to determine the size, quality and extent of the geological play. If there is no oil or it is not commercially viable, the well will be plugged and abandoned.
Exploration and Appraisal takes a period of 5-10 years and this is where the Early Oil Pilot Scheme comes in as shown in the figure below
• Development & Construction
Once it is confirmed that the oil discovery is commercially viable, the development plan begins The Plan of Development involves extensive stakeholder engagement and must consider environmental, social, economic and operational issues. These plans are approved by governments and regulatory authorities and their implementation is carefully monitored.
These phase involves:
The construction of the Central Processing Facility (CPF). A bigger and modern CPF will be set up in 2019 after Kenya goes full/ large scale in oil production. Tullow has already provided the Energy & Petroleum Ministry the design of the Central Processing Facility which is to be set up at Lokichar. When Kenya goes large scale, over 200 wells in Lokichar will feed into the central processing facility. At the Central Processing Facility, dry gas and water shall be separated from oil.
Development of the Crude Oil Pipeline by 2019-2020
This phase would also take 5-10 years.
The development of the field until production starts is costly. The entire production is planned in detail and the production plants, infrastructure are then designed and build.
• Commissioning & Production
During this phase of production, Successful developments should be carried out in the most cost-effective way, without compromising high safety standards, and with regard for the environment and local communities that may be affected by our work. Production can last many decades. 20-50 years.
There will be value created when; cost effective production provides high-margin cash flow to the IOC. Cash flow for the IOC is dependent on oil price and expenditure, continued local employment and use of local suppliers to support production operations and monetary value for host country from production tax and royalties.
This last phase will take a period of 3-10 years.
When production ceases, facilities are decommissioned and the location is fully remediated. Decommissioning will ensure full restoration of the site.
There will be local employment for demolition, waste management and fabrication.
Description and Status of Early Oil Pilot Scheme
Exploration activities have been going on in Lokichar since 2012. In the Early Oil exports, 2,000 barrels of oil are expected to be drilled daily from 5 active wells.
These wells are located at the South Lokichar Basin in Amosing and Ngamia fields.
Currently only 76 wells have been drilled and to keep the oil flowing, oil producers are exploring more wells in and out of Turkana.
In Kerio Valley Marakwet, a post well analysis is being conducted by Tullow and there was a good oil show in Cheptuket-1 well that indicated the potential of significant oil Generation in this particular region.
The Turkana community have experienced some socio-economic benefits from the Early Oil Pilot Program which include:
Business and Job Opportunities which include: freight forwarding and logistics, civil works, catering, security and warehousing
Training and Vocational skills to grow the local capacity of the communities to participate in the Oil and Gas industry
Infrastructure for example the construction of A1 highway, Kainuk Bridge and Isiolo-Turbo-Moyale road.
Improvement of Education systems by building classes
Construction and Improvement of Health facilities
Electrification projects by Kenya Power, Ketraco courtesy of the Ministry of Energy and Petroleum, Tullow, Maersk and Africa Oil.