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BY CORRESPONDENT,NAIROBI,25TH JUNE 2019-The government has signed Heads of Terms Agreements (HoTs)with Tullow Kenya, Total and Africa Oil. The HoTs agreements provide a framework and commercial certainty required to move ahead with negotiating the fully termed upstream and midstream long form agreements ahead of the Projects’ Final Investment Decision (FID).
In a speech read on his behalf by the Principal Secretary, State Department for Petroleum, Mr Andrew Kamau, cabinet secretary ministry of petrolium and mining John Munyes says the HoTs agreements signed today are for the discoveries of fields in Block 10 BB and 13 T in the South –Lokichar Basin.
Specifically, the parties have agreed that Amosing, Ngamia and Twiga fields should be developed as the Foundation Stage of the development with a 60,000-80,000 bopd (barrels of oil per day) Central Processing Facility
The CS says this phased approach brings significant benefits as it enables an early FID, takes advantage of the current low-cost environment for both the field and infrastructure development and provides the best opportunity to deliver First Oil in a timeline that meets the Government of Kenya (GoK) expectations.They define the project by drawing out;
- The resources that will be developed within this agreement
- The obligations of each parties
- They also define Physical incentives such as the development of the Crude Oil Pipeline from Lokichar to Lamu and more
Munyes has also stated that following the signing, GoK together with the Joint Venture Partners will now focus their efforts on securing financing for the pipeline.At the same time, it will endeavour to finalize the ongoing Front-End Engineering & Design (FEED) and Environmental & Social Impact Assessment (ESIA) which are key to reaching FID
He added that Mineral and Petroleum resources have the potential of becoming one of the Country’s biggest foreign exchange earners and the engine that drives our Country’s infrastructure growth with Oil & Gas development being part of the enablers for the Big 4 agenda for Kenya.He reaffirmed the government’s commitment in ensuring that the Kenyans government together with its partners reach First Oil.Further he has promised that the government will also continue with further exploration in Lamu, Anza, Mandera, and Tertiary Rift sedimentary basins, so as to ensure maximum development of the country’s oil and gas resources.