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Tullow Shuts down Kenyan Oilfield Operations due to Unrest

Source: Reuters 7/25/2018, Location: Africa

Tullow Oil has stopped work at its Kenyan oilfields and halted trucking operations after protests by the local community disrupted a transport scheme, its chief executive said on Wednesday.

The British company aims to produce the first oil from the $2.9 billion Kenya project by 2021, which would open up the country's oil industry to exports.

But protests and security problems have halted a pilot scheme which currently trucks around 600 barrels of oil per day to a storage facility in Mombasa before a pipeline is built which should be operational by 2022.

Kenyan media said the protests were to demand the deployment of more security forces in the area, which has long been plagued by banditry and cattle rustling. Turkana, where the oil blocks are located, also lies near South Sudan, a nation torn by years of conflict.

Officials at the Ministry of Petroleum and Mining could not immediately be reached for comment.

"What you saw locally was the local people, the community... using the trucking operation as a lever really to demonstrate to the national government that the security situation on the ground had to improve," Tullow's Chief Executive Paul McDade told Reuters.

"We'd expect to be up there working, getting the field back operating again and trucks moving again in the near future. But it's important to take the time out so that when we do return we have a more secure environment."

Tullow is targeting production in Kenya of at least 100,000 barrels of oil equivalent per day after first oil in 2021/22.

The company is considering reducing its stake in the project to around 30 percent from 50 percent before the final investment decision, a spokesman said. The other partners in the project are Total and Africa Oil.

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