Kenya is edging closer to commercial oil production after more than a decade since it discovered crude oil in Turkana County.
The South Lokichar Basin project is targeting first oil in December 2026, with the first commercial crude exports expected through the Port of Mombasa in the first quarter of 2027.
According to EPRA, the developer remains on track with the timelines approved under the project’s Field Development Plan.
The project is expected to generate government revenue, create jobs and increase economic activity around Turkana and other parts of the country.
Kenya Targets 20,000 Barrels Per Day
The project covers oil discoveries in Blocks T6 and T7 in the South Lokichar Basin, where oil was first discovered in 2012. Gulf Energy E&P BV is developing the project after acquiring the Kenyan assets previously held by Tullow Oil.
Under the approved development plan, the first phase is expected to produce 20,000 barrels of crude oil per day, increasing to about 50,000 during the second phase, with full development by 2032.
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The project moved closer to implementation on September 27 after a 1,500-horsepower drilling rig arrived at the Port of Mombasa. The rig is expected to be transported to Turkana, where drilling is scheduled to support the commercial development program. Gulf Energy has also contracted Baker Hughes for well services and SLB for an early production facility.
EPRA said the Field Development Plan was submitted in September 2025, assessed for technical and commercial viability, and subsequently approved and ratified by Parliament in February 2026.
The regulator is currently monitoring the development work against the approved timetable.
How Much Revenue and Jobs Could Oil Generate?
The National Treasury estimated that Kenya could earn between US$1.05 billion (about KSh136 billion) and US$2.9 billion (about KSh371 billion) over the life of the project, depending on crude oil prices.
The higher estimate uses an oil price of US$70 per barrel, while the lower projection uses US$60 per barrel. Government revenue would come through mechanisms including profit-oil sharing and government participation.
State agencies are also projected to benefit from the development. Treasury estimates that Kenya Petroleum Refineries Limited (KPRL) could earn about KSh42.3 billion from storage and handling. At the same time, the Kenya Ports Authority (KPA) could receive KSh41.9 billion from the New Kipevu Oil Jetty.
The project is also expected to create more than 3,000 direct, indirect and induced jobs during development and production. Opportunities are expected across oil operations as well as transport, logistics, hospitality, retail, construction and other support services.
The government estimates the project will require more than US$5 billion (about KSh646 billion) in capital investment and about US$8 billion (about KSh1.03 trillion) in operating expenditure over 25 years, creating opportunities for Kenyan businesses supplying goods and services.
Why Turkana Oil Will Not Immediately Cut Fuel Prices
When Kenya becomes an oil-producing country, motorists should not expect the December 2026 production to translate into cheaper oil prices.
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This is because Turkana will initially produce crude oil, and Kenya does not currently have the refinery capacity to process the crude into the refined petroleum products used by motorists.
Energy Cabinet Secretary Opiyo Wandayi said the initial production will therefore be destined for export markets.
The current plan provides for crude to be transported from the oil fields towards Mombasa by road or rail, before being exported through the Kipevu facilities. Parliament has also been told that environmental safeguards are being updated to reflect the revised transport arrangements.
This means petrol and diesel prices will continue to depend largely on factors such as international refined petroleum prices, the exchange rate, taxes and levies, and other costs incorporated into Kenya’s fuel-pricing system.
Immediate economic gains from Turkana oil are expected to come through crude exports, government revenue, employment, foreign-exchange earnings and increased business activity.
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