Kenyan President William Ruto has said the country aims to begin commercial crude oil exports from the South Lokichar Basin in Turkana by December 2026, more than 14 years after oil was discovered, although the energy regulator’s timetable puts the first shipments under the new development programme in early 2027.

Ruto announced the target during his Mashujaa Day address on October 20, as the government seeks to advance development of the oilfields despite financing constraints and infrastructure requirements.

“In the months ahead, we will unlock new opportunities in our energy sector. Work in the Lake Turkana Basin is progressing rapidly, with oil exports targeted to begin in December,” Ruto said, according to his speech published by Eastleigh Voice.

The announcement differs from the timetable outlined by the Energy and Petroleum Regulatory Authority (EPRA) in September. EPRA Director of Petroleum and Gas Edward Kinyua said commercial production was scheduled to begin in December, with the first crude shipments leaving Mombasa in the first quarter of 2027.

Ruto’s target is closer to that set by Energy Cabinet Secretary Opiyo Wandayi in April, when he said the first shipment would leave Mombasa in December 2026. Gulf Energy Chairman Francis Njogu has told lawmakers that December 1 is the formal production target. The discrepancy leaves uncertainty over whether December marks the start of production or exports. Neither milestone has been achieved, and no updated regulatory timetable has been identified that reconciles the two targets.

Wandayi told a parliamentary committee at the time that “by the end of this year, before December 31, we shall have the first tranche of crude oil moving to the Port of Mombasa for export.”

See IntelliNews: Kenya targets December start for South Lokichar oil exports as Gulf Energy takes over Tullow assets

Gulf Energy takes over from Tullow

Kenyan energy company Gulf Energy is leading development after acquiring Tullow Oil’s (LSE: TLW; GSE: TLW) entire working interest in Kenya through its affiliate, Auron Energy E&P Limited. The transaction was completed on September 25, 2025, for a minimum cash consideration of $120mn, payable in stages, according to Tullow’s announcement.

Gulf Energy’s phased development plan targets production capacity of about 20,000 barrels per day (bpd) in the first phase, potentially rising to 50,000 bpd once additional infrastructure is available. The initial target is planned capacity rather than a confirmed production rate for December.

A drilling rig leased from Great Wall Drilling Company arrived at the Port of Mombasa on September 25 ahead of drilling scheduled to begin in Turkana on November 1. The equipment must undergo commissioning and acceptance checks before drilling begins, with well completion and production facilities representing further milestones before sustained commercial output can be established.

Gulf Energy has contracted Baker Hughes (NASDAQ: BKR) to provide integrated well services and SLB (NYSE: SLB) to deliver the early production facility for the first phase. The overall project is valued at about $6bn. The Treasury estimates lifetime government revenue at up to $2.9bn at an oil price of $70 per barrel, falling to about $1.05bn at $60.

See IntelliNews: Kenya’s South Lokichar oil project advances as drilling rig arrives in Mombasa

A 1,100km road to the coast

The project’s field development plan envisages transporting crude approximately 1,100 kilometres by road from Turkana to Kenya Petroleum Refineries Limited’s facilities at Changamwe in Mombasa for storage and export through the Kipevu Oil Terminal II.

In August, Kenya Pipeline Company (NSE: KPC) signed a 25-year agreement through Kenya Petroleum Refineries Limited (KPRL), its subsidiary, to receive, store and handle Gulf Energy’s crude for export through Kipevu Oil Terminal II. KPC estimates the deal could generate about KES93.68bn ($725mn) in gross revenue, depending on throughput and tariffs. The agreement gives a commercial use to the KPRL refinery complex, which has been idle since 2013.

See IntelliNews: Kenya Pipeline Company seals $725mn crude storage deal with Gulf Energy

Dangote has since confirmed a $327mn purchase of a 24.76% stake in KPC, giving the Nigerian group a stake in the company that will handle South Lokichar crude in Mombasa.

See IntelliNews: Nigeria’s Dangote confirms $327mn purchase of 24.76% stake in Kenya Pipeline Company

At the planned first-phase production rate of 20,000 bpd, the operation would require, according to official estimates, approximately 100 insulated tanker loads daily and a fleet of around 600 trucks operating on six-day round trips.

The crude must be loaded at elevated temperatures and transported in insulated vehicles because it solidifies at ambient temperatures. The plan also requires heated storage, offloading equipment and loading infrastructure in Mombasa, making the transportation system a significant execution challenge.

These requirements help explain why first oil production in December would not necessarily translate into exports that month. Commercial shipments depend not only on producing crude but also on accumulating sufficient volumes, commissioning storage and loading infrastructure, and establishing reliable transport arrangements.

Fourteen years after discovery

The South Lokichar Basin’s oil deposits were discovered in 2012 by Tullow and its partners. Development stalled for years over commercial viability, financing and infrastructure challenges, delaying large-scale production.

Kenya previously exported crude under the Early Oil Pilot Scheme, selling about 415,000 barrels for $28.3mn between 2019 and 2022, including a first cargo of about 240,000 barrels sold to ChemChina UK for about $12mn in 2019. The programme tested transportation and export logistics before full field development. The government’s latest targets therefore concern the beginning of sustained commercial operations rather than Kenya’s first-ever crude exports.

Unlike earlier plans for a dedicated pipeline from Turkana to Lamu, the current development envisages road transport to Mombasa during the first phase, with rail transportation considered as production expands. The proposed Lokichar–Lamu pipeline is not required for initial exports.

Lamu refinery a longer-term outlet

Separately, Kenya held a groundbreaking ceremony on September 30 for Aliko Dangote’s planned 700,000-bpd refinery in Lamu. The facility remains under development, and no commercial supply agreement or operational connection to South Lokichar has been established.

The $16bn refinery, which Dangote plans to finance 70% with debt, could eventually process Turkana crude alongside Ugandan oil shipped via Tanzania and seaborne imports. On October 14, a court in Malindi declined to extend interim restrictions on land linked to the project, allowing work to proceed, although the underlying compensation dispute remains unresolved and returns to court on November 24.

See IntelliNews: Kenyan court declines to extend land restrictions linked to planned $16bn Dangote refinery

The immediate test for Gulf Energy is whether drilling, production facilities and the specialised road-transport system can support first oil in December and subsequent sustained exports. The timing of the first shipment remains uncertain.