Kenya’s long-running effort to commercialise its oil reserves has reached a major milestone after a $20 million drilling rig arrived at the Port of Mombasa ahead of deployment to the South Lokichar Basin in Turkana County.
Gulf Energy E&P BV SEZ plans to begin drilling on November 1, 2026, before targeting first commercial oil production in December. Initial production is expected to reach 20,000 barrels per day before increasing to 50,000 barrels per day under a second development phase.
The project could finally turn Kenya into a commercial oil producer more than 14 years after commercially viable crude was discovered in Turkana.
Key Overview
- The 1,500-horsepower GW70 drilling rig has arrived at Kilindini Port in Mombasa.
- The rig is valued at more than $20 million, or about Sh2.59 billion.
- Gulf Energy has set November 1, 2026 as the planned drilling start date.
- First oil production is targeted for December 2026.
- Phase One targets production of 20,000 barrels per day.
- Phase Two is expected to increase output to 50,000 barrels per day.
- Kenya’s first commercial crude exports are expected through Mombasa in Q1 2027.
- Government projections indicate potential lifetime fiscal earnings exceeding $2.9 billion.
$20 Million Rig Marks Major Step Toward Production
The arrival of the GW70 integrated onshore drilling rig marks one of the clearest signs yet that Kenya’s South Lokichar oil development is moving from planning towards commercial production.
The 1,500-horsepower rig arrived at Kilindini Port aboard the MV Transit Sedanka after travelling from Duqm Port in Oman.
Valued at more than $20 million, the equipment has been leased by Gulf Energy from Great Wall Drilling Company under a long-term arrangement.
The rig will be transported by road to Turkana County after offloading and will undergo commissioning and acceptance checks before drilling begins.
Gulf Energy Chief Executive Paul Limoh has said the company remains on schedule for a November 1 spud date, the point at which drilling of the first well formally begins.
The milestone comes more than a decade after commercially viable oil was discovered in South Lokichar in 2012.
First Oil Targeted for December 2026
Gulf Energy is targeting first commercial oil in December 2026, with Kenya’s first crude exports expected through the Port of Mombasa during the first quarter of 2027.
The project’s approved phased development strategy starts with approximately 20,000 barrels per day during Phase One.
Output is then expected to increase to around 50,000 barrels per day during Phase Two, substantially expanding Kenya’s domestic petroleum production capacity.
The initial development is part of a wider project estimated at around $6 billion, covering drilling, production facilities, transportation and supporting infrastructure required to commercialise the South Lokichar resource.
Gulf Energy has contracted Baker Hughes for integrated well services, while SLB has been selected to provide the Early Production Facility required for the first phase.
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South Lokichar Enters a New Development Phase
The project covers several oil fields within the South Lokichar Basin, including Ngamia, Amosing, Twiga, Ekales, Agete and Etom.
The government’s current development framework expects production to begin at 20,000 barrels per day before expanding to 50,000 barrels per day as additional infrastructure and wells come online.
Unlike earlier plans centred on a dedicated crude oil pipeline towards Lamu, the initial production strategy envisages transporting crude by road or rail towards the coast.
This approach allows commercial production to begin before construction of more capital-intensive long-distance pipeline infrastructure.
The crude can then be handled through existing coastal facilities as Kenya gradually scales production.
Government Could Earn More Than $2.9 Billion
Commercial development of South Lokichar could also generate significant fiscal revenues.
Government estimates indicate that Kenya could earn more than $2.9 billion over the project’s lifetime, although actual revenues will depend heavily on crude oil prices, production volumes, operating costs and the eventual lifespan of the fields.
Beyond direct government revenues, oil development could stimulate demand for transport, logistics, engineering, construction, equipment maintenance and other services supporting production in Turkana and along the route to the coast.
The industry could also generate jobs and opportunities for Kenyan suppliers if local-content requirements are successfully implemented.
Kenya’s Long Wait for Commercial Oil Nears an End
Commercial oil production has taken considerably longer than initially anticipated.
Oil was discovered in Turkana in 2012, but development was repeatedly delayed by financing challenges, infrastructure requirements and difficulties securing strategic investors.
Gulf Energy subsequently took control of the project and received approval to proceed under a phased Field Development Plan.
The arrival of the GW70 rig now provides a tangible indication that physical development is accelerating.
Successful production in December would move Kenya from an oil-exploration story to an actual producing market, while the planned first exports in early 2027 would mark another important milestone for the country’s energy sector.
The November drilling programme will therefore be closely watched. Meeting the December first-oil target would represent the culmination of more than a decade of efforts to commercially develop Kenya’s most significant known petroleum reserves.
Sources: Kenya Broadcasting Corporation / Kenya News Agency / Business Daily Africa / The Standard / Kenya Parliament / Pulse Kenya / Eastleigh Voice
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