Following the 2012 oil discovery in Turkana, multiple administrations have faced difficulties advancing the South Lokichar project beyond the exploration phase toward commercial production.
International investors entered and departed the venture, funding sources evaporated, and the worldwide shift toward renewable energy seemed poised to permanently sideline petroleum development goals.
However, Energy and Petroleum Cabinet Secretary Opiyo Wandayi indicates that Kenya has never been nearer to realizing the advantages of its substantial crude oil resources.
He attributes the project’s breakthrough to the approval of a modified Field Development Plan and the endorsement of a new investor-driven approach.
During an interview with The Star, Wandayi characterized the authorization of the South Lokichar development as among the most pivotal achievements in the nation’s history.
“We have transitioned from perpetual discussions about possibilities to a concrete development trajectory,” he stated.
The initiative commenced in March 2012 when Tullow Oil and its partners discovered oil at the Ngamia-1 well in Turkana.
The finding generated enthusiasm throughout the nation and established Kenya as a prospective oil producer in East Africa.
Additional exploration resulted in nine further discoveries – Ngamia, Ekales, Amosing, Twiga, Etuko, Agete, Ewoi, Etom, Ekunyuk and Erut.
The South Lokichar Basin is estimated to hold approximately 2.85 billion barrels of oil in place, with recoverable resources totaling about 429 million barrels throughout the field’s lifespan.
Numerous questions exist regarding why commercial production remained unattainable despite the resource potential.
The original consortium encountered difficulties as worldwide investors redirected capital toward renewable energy initiatives.
In 2023, Tullow’s joint venture partners, Africa Oil and Total Energies, withdrew from the project, leaving the British entity to advance development independently.
According to Wandayi, this departure raised significant doubts about whether the project would ever achieve production status.
“Efforts to secure another strategic international investor proved unsuccessful. The global financing landscape had transformed and numerous conventional oil investors were retreating from frontier ventures,” he explained.
The breakthrough materialized when Gulf Energy E&P BV, a Kenyan-affiliated energy entity, consented to acquire Tullow Kenya’s interests and commit to developing the project.
“This represents a substantial investment. Tullow Oil could not proceed due to the enormous capital requirements involved. We have now adopted an alternative path, and we are pleased that Gulf Energy acquired Tullow Oil’s interests.”
Unlike previous potential partners, the company demonstrated both financial capacity and willingness to pursue a phased development approach.
“This marked the turning point,” Wandayi stated. “The entry of Gulf Energy offered a practical resolution to an issue that had persisted for years. It provided us with a credible investor prepared to advance the project and unlock Kenya’s upstream petroleum potential.”
Following the acquisition, Gulf Energy submitted a revised Field Development Plan in September 2025.
Following evaluation by the Energy and Petroleum Regulatory Authority, the ministry approved the plan in November and submitted it to Parliament for ratification.
“I am the first Cabinet Secretary to approve the Field Development Plan for the Turkana oil project, as mandated by law, and Parliament has already ratified it. We have now entered a new phase as we prepare for full commercial production,” he stated.
According to Wandayi, the nation has never been closer to becoming a crude oil exporter, with all essential approvals secured and the development framework established.
“We are confident that oil will commence flowing before year-end. We have implemented sufficient measures and, provided all stakeholders collaborate, Kenya will soon begin exporting crude oil,” he affirmed.
“Currently, we lack a refinery, but we anticipate establishing one in the future to enable local processing of our crude,” Wandayi indicated.
He contended that commercial production in Turkana would not only generate revenue and employment but also send a clear message to international investors that Kenya’s upstream petroleum sector is finally operational following more than a decade of uncertainty.
The approved plan proposes a phased development strategy commencing with production of up to 20,000 barrels per day and progressively increasing output to 50,000 barrels daily by 2032.
Assuming timelines remain on track, initial oil production is anticipated before the end of 2026. Wandayi argues that the phased model renders the project commercially viable.
Instead of constructing all infrastructure simultaneously, the investor will develop production capacity incrementally, reducing initial risks while generating revenue to support future expansion.
The project is projected to require over $5 billion (Sh646 billion) in capital investment and approximately $8 billion (Sh1.03 trillion) in operational expenditure across a 25-year production period.
A significant portion of that expenditure is expected to remain within the local economy through procurement, logistics, transportation and support services.
“The operational expenditure alone represents a substantial opportunity for Kenyan enterprises. These are resources that will circulate through the economy and create employment for our citizens,” Wandayi stated.
Government estimates indicate the project could generate over 3,000 direct, indirect and induced jobs during development and production.
Beyond employment, the Cabinet Secretary states the project will stimulate growth across multiple sectors, including transportation, hospitality, retail and logistics.
Communities along the project corridor are also expected to benefit from enhanced infrastructure and market access.
“When major infrastructure enters an area, it transforms the economic landscape. Roads improve, businesses emerge and opportunities multiply,” he explained.
The project has also revived discussions regarding strategic infrastructure connecting Turkana to the remainder of the country.
Lessons from the Early Oil Pilot Scheme have influenced the new development model, particularly after it became evident that Kenya earned Sh3.7 billion from the sales.
Between 2018 and 2022, Kenya exported 414,777 barrels of crude oil through the pilot program utilizing a fleet of 100 trucks transporting oil from Turkana to Mombasa.
The exercise produced critical operational data and demonstrated that Kenyan crude could attract buyers in international markets.
The pilot established a price benchmark for Kenya’s crude and tested logistics systems that will now support commercial production.
“It provided evidence that the resource is marketable. It also delivered practical lessons on transportation, storage and export logistics,” Wandayi stated.
Although the pilot program generated approximately $28.3 million (Sh3.7 billion) in revenue, costs surpassed earnings, creating a deficit incorporated into recoverable project costs.
Nevertheless, the government considers the exercise a necessary investment in knowledge and preparedness.
Wandayi defended the decision, stating it was essential to attract financing for a capital-intensive project that had difficulty securing investors.
“We needed to strike a balance between national interests and commercial realities. Without a viable framework, the project would have remained theoretical,” the Cabinet Secretary explained.
The Cabinet Secretary stated that environmental protection concerns had also been addressed through comprehensive assessments, including approved environmental impact studies, a zero-flaring policy, biodiversity management programs and community protection measures.
He dismissed concerns that the project might expose the country to environmental risks without proper safeguards.
“Environmental stewardship is not optional. It is incorporated into the development plan and constitutes part of the approval requirements,” he emphasized.
For a nation that imports nearly all its petroleum products, commercial oil production holds profound symbolic and economic importance.
Nevertheless, Wandayi cautioned against expectations that Turkana oil would immediately result in reduced fuel prices.
Kenya will continue importing refined petroleum products because the South Lokichar project concentrates on crude oil production rather than domestic refining.
Instead, he noted, the advantages will manifest through government revenues, employment generation, foreign exchange earnings and improved energy security.
“The value of this project transcends fuel prices. It involves establishing a new economic sector, attracting investment and generating revenue to support development,” he stated.
Following years of delays, investor withdrawals and skepticism, Wandayi believes Kenya is finally nearing the point when its oil discovery can start delivering tangible returns.
“The discovery occurred in 2012. Many people questioned whether we would ever reach this stage,” the Cabinet Secretary remarked, adding, “Today, we have an approved development plan, an investor committed to production and a clear pathway to the first oil. This is how we have unlocked Turkana oil.”