12 Oct 2015 – Some 33 companies and consortia have submitted initial bids to advise on the Kenya Petroleum Technical Assistance Project (KEPTAP), according to two sources.
The bidders will be narrowed down to six, which will receive a request for proposal (RFP) at the end of the October. The winning bidder will be selected from six consortia, the first source said.
KEPTAP is a project aimed at developing the country’s midstream oil and gas infrastructure. it will include a heated pipeline that can transport crude from Hoima in Uganda through Lokichar, in the Kenyan Rift Valley, to Lamu on the Kenyan coast. The capex requirements for the project is estimated to be USD 4bn.
The consortia are made up of technical, legal and financial advisers. The World Bank has allocated USD 50m in funding to subsidise the hiring of an advisory consortium, in an effort to progress KEPTAP.
The project is in need of advisers because the Kenyan government cannot make headway; it is not adequately making decisions and, even in a best case scenario, no fundamental decisions on the project will be made until 2016, the first source said.
Fundamental decisions on things like the capacity of the pipeline and the transit tariff to transport the oil from Uganda to Kenya have not yet been made, the first source added.
According to the second source, there are 33 firms and consortia bidding for the contract. They are:
Kenya and Uganda have both embarked on ambitious plans to bring recently discovered crude oil reserves into production. Both projects rely on KEPTAP being completed in order to have the necessary infrastructure to export the oil.
In Uganda, the Albert Basin is a exploration project under development by Total [NYSE:TOT], Tullow Oil [LNO:TLW] and China National Offshore Oil Corp (CNOOC). Tullow has previously said it expects to decide on whether to proceed with investment in early 2016.
Tullow Oil and Africa Oil jointly discovered 600m barrels of oil in the South Lokichar Basin in northwestern Kenya in 2012.
by Katie McQue