Kenya could begin exporting crude oil commercially before the end of 2026 following renewed progress on the South Lokichar oil project in Turkana County.
The government has approved a revised development plan for the oil fields and secured a new investor, Gulf Energy E&P BV, marking a major breakthrough for a project that has faced years of delays and uncertainty.
Energy and Petroleum Cabinet Secretary Opiyo Wandayi said the country has finally established a clear path toward commercial production after more than a decade of waiting.
“We have moved beyond discussions and speculation. We now have an approved development framework and an investor committed to taking the project forward,” Wandayi said.
From Discovery to Development
Kenya’s oil journey began in 2012 when significant crude oil deposits were discovered at the Ngamia-1 well in Turkana. Subsequent exploration uncovered additional reserves across several sites within the South Lokichar Basin, making it one of East Africa’s most promising petroleum prospects.
Current estimates indicate the basin contains approximately 2.85 billion barrels of oil in place, with about 429 million barrels considered recoverable.
Despite these discoveries, commercial production remained elusive due to financing challenges and changing global investment priorities, particularly as many international investors shifted away from fossil fuel projects.
Gulf Energy Steps In
The project’s future came into question after Tullow Oil’s partners, Africa Oil and TotalEnergies, exited the venture in 2023.
According to Wandayi, efforts to attract another international oil company proved unsuccessful as investors became increasingly cautious about funding large-scale upstream petroleum developments.
The situation changed when Gulf Energy acquired Tullow Kenya’s interests and proposed a phased development strategy.
“The entry of Gulf Energy provided a practical solution to challenges that had stalled the project for years,” Wandayi noted.
Following the acquisition, the company submitted a revised Field Development Plan in September 2025, which was later approved by the government and ratified by Parliament.
First Oil Expected Before End of 2026
Government officials now expect Kenya’s first commercial crude oil exports before the close of 2026.
The approved plan will see production begin at approximately 20,000 barrels per day before gradually increasing to 50,000 barrels daily by 2032.
Officials say the phased approach reduces financial risks while allowing infrastructure development to be spread over time.
“We are optimistic that Kenya will start producing and exporting oil before the end of the year,” Wandayi said.
Sh1.7 Trillion Economic Opportunity
The South Lokichar project is expected to inject substantial resources into the economy.
Government projections estimate capital investment will exceed Sh646 billion, while operating costs over the project’s 25-year lifespan are expected to surpass Sh1 trillion.
Combined, the project could generate nearly Sh1.7 trillion in economic activity through procurement, logistics, infrastructure development, and support services.
Authorities estimate more than 3,000 jobs could be created directly and indirectly during the development and production phases.
The project is also expected to stimulate growth in transport, hospitality, retail, and other sectors, particularly in northern Kenya.
Lessons from the Pilot Phase
Kenya previously tested its oil export capabilities through the Early Oil Pilot Scheme conducted between 2018 and 2022.
During the exercise, more than 414,000 barrels of crude oil were transported from Turkana to Mombasa and exported to international markets, generating approximately Sh3.7 billion in revenue.
Although the pilot did not turn a profit, officials say it provided valuable operational experience and demonstrated that Kenyan crude could find buyers in global markets.
Environmental Safeguards Included
The approved development plan incorporates environmental protection measures, including biodiversity conservation programmes, community safeguards, environmental impact assessments, and a zero-flaring policy.
Wandayi emphasized that environmental compliance remains a key condition of the project’s implementation.
“Environmental stewardship is an integral part of the development framework and will remain a priority throughout the project lifecycle,” he said.
Oil Production Not Expected to Lower Fuel Prices Immediately
Despite the optimism surrounding the project, government officials have cautioned that local oil production will not automatically result in lower fuel prices.
Kenya currently lacks a refinery capable of processing its crude oil and will continue importing refined petroleum products.
Instead, officials expect the biggest gains to come from increased government revenue, foreign exchange earnings, infrastructure development, and the creation of a new industrial sector.
“The significance of this project goes beyond fuel prices. It is about building a new pillar of economic growth and attracting long-term investment into the country,” Wandayi said.
After 14 years of delays and uncertainty, Kenya now faces the challenge of converting its oil discoveries into lasting economic benefits as it prepares to join the ranks of oil-producing nations.
