Tullow and Africa Oil prepare Lokichar Development
The independent company Tullow Oil plc (Tullow) from UK and the Vancouver-based Africa Oil Corporation (Africa Oil) have accumulated sufficient reserves over the last two years to reach the threshold to develop the Blocks 10BB and 10A of the South Lokichar Basin in the north of Kenya in East Africa.
Since Loperot-1 in 1992, Africa Oil, then with Tullow, accumulated discoveries such as Ekales-1 and Agete-1, and more recently in Amosing-1 and Envoi-1 in acreage of the the East African Rift Basin lying across Ethiopia and Kenya.
Located approximately 500 kilometers east of Lake Albert, the Lokichar Basin benefit from the same geological structure as Lake Albert Rift Basin.
These discoveries in the Block 10BB have shown a high quality crude oil, but with a waxy gravity of 29 degree API.
Considering that exporting this crude oil will suppose the construction of a 850 kilometers pipeline to the East Coast of Africa on the Indian Ocean, the waxy nature of the crude oil requires a deep evaluation of the different concepts to treat and export this crude oil on such distance.
Although the South Lokichar Development is an onshore crude oil project, the distance from shore to export will have a major impact on the capital expenditure of the project.
But, since most of the exploratory wells yielded higher reserves than expected, Tullow and Africa Oil have estimated the South Lokichar recoverable reserves to 600 million barrels of oil (bo) that should exceed 1 billion bo in respect with the upside still to be appraised.
Tullow and Africa Oil start pre-FEED on South Lokichar
In parallel the two partners will carry out the pre-front end engineering and design (pre-FEED) for the South Lokichar full field development including the 850 kilometers export pipeline.
Because of its waxy nature, the crude oil produced from the Lokichar Basin tends to solidify at ambient temperature.
Therefore the pipeline to connect South Lokichar to the Indian Ocean will require energy intensive trace heating all along the 850 kilometers.
Currently used in Canada, the heat tracing technique will suppose significant power supply along the pipeline in addition to the pumping stations.
In this context, Tullow and Africa Oil are planning to complete the design phase of the South Lokichar project by end of 2015 in order to start construction of the West-East Kenya pipeline in following.