Africa Oil Corp. has declared that Heads of Terms agreements with the Government of Kenya and joint venture companions, Africa Oil, Tullow Oil plc and TOTAL S.A. have been inked for the construction of the oil fields in the South Lokichar basin.
The Joint Venture Companions and the Government of Kenya have ended negotiations around vital fiscal and industrial principles for Project Oil Kenya with negotiations between the parties documented in various Heads of Terms which has been signed by the Joint Venture Companions and the Government of Kenya in Nairobi.
It is a material and inspiring step forward, which gives all parties certainty that the construction venture shall be robust at low oil prices. Keith Hill, President, and CEO of Africa Oil commented, “We’re more than happy with the signing of the Heads of Terms offer because it marks an exciting step ahead for the project. The conclusion of the agreements around vital fiscal and business principles is a crucial and breakthrough towards a Final Investment Decision, providing a solid construction framework and confidence to all parties that the venture is strong at low oil prices.”
The Government of Kenya continues to make a good improvement, in buying the land for the upstream and pipeline as well as securing water rights for the upstream. Whereas these operations are progressing well, they’re taking more delayed than initially forecast. The National Environment Management Agency has requested that additional group session take place for the Environmental and Social Influence Assessments which will now be offered in the second half of 2019.
All parties proceed to work effectively together throughout all development workstreams, and vital progress has been made thus far in 2019. The joint venture companions and the Government of Kenya are assessing the most certainly timeline to FID which is now expected in 2020.