- Jul 5, 2016
NAIROBI, KENYA: Kenya's crude could be priced higher than oil produced by some Arab states.
The Financial Standard can exclusively report that Kenya's crude grade ranks among the best in the world. This is according to preliminary tests carried by the Ministry of Energy and Petroleum and the companies that have been exploring oil in Turkana.
According to Ministry of Energy officials, preliminary oil tests by Government show it has low sulphur content and density, which means is sweet and light. The two – density and sulphur content – are among the key quality measures for crude.
It usually results in crude classified as light or heavy according to density, and sweet or sour depending on its sulphur content. Premium crude oils are usually light and sweet.
Tullow Oil, which has also tested the oil separately, said Kenyan crude is of high quality. It is likely to fetch a premium price once it hits the market.
A Ministry of Energy official, who declined to be named because he is not authorised to speak on behalf of the Government said Kenya's crude oil is almost akin to Brent crude, highly rated oil from UK's North Sea, which is a blend of 15 different crude oils from the area. This is in comparison to its sulphur content and density.
Crude oil density is measured using the American Petroleum Institute (API) Gravity Standard, whereby oil with an API of over 30 degrees Fahrenheit are light while those with an API of 20 degrees or less are considered heavy and cost more to extract and refine. Oils with high sulphur content, usually over 0.5 per cent of the total weight, are considered sour and anything less than 0.5 per cent being considered sweet.
Kenyan oil has an API Gravity of between 25 and 38 degrees according to the preliminary tests. Its sulphur content falls within the under 0.5 per cent level - making it light and sweet. According to sources, some wells at the Lokichar Basin have a sulphur content of below 0.1 per cent, making oil from these wells among the sweetest in the world.
The oil from the Lokichar Basin compares favourably to the best crude oil in the world, which is produced in Libya with API gravity ranging between 32 and 44 degrees and sulphur content of as low as 0.07 per cent. The only other crude that beats Libya is Malaysian oil.
It is also in comparison to Brent crude, which has an API of 38 degrees and a sulphur content of 0.37 per cent. Brent is the second most popular benchmark after the American West Texas Intermediate, which has an API of 39.6 degrees and a sulphur content of 0.24 per cent. Dubai crude – which is however not a representative of all Middle Eastern Crude Oils due to the many different grades in the region – has an API of 31 degrees and sulphur content of two per cent.
The flipside however is that the Kenyan oil is waxy with a high pour point. It stops flowing at fairly low temperatures, meaning it would need heated transport and storage facilities.
The Ministry of Energy official explained that waxiness is not necessarily a major issue of concern, and occurs in both light and heavy crude oil. Light sweet crude oil are easier and cheaper to process. The oil also flows to the surface and remains in a fluid state but solidifies when moved to areas where temperatures are lower than those in Turkana.
Tullow and Africa Oil have in their earlier disclosures to investors said the Kenyan crude is of high quality, with oil from some of the wells having an API Gravity of up to 38 degrees. The firm confirmed to the Financial Standard that tests it has carried out so far show Kenyan crude to be of high quality.
Source; Revealed: Kenya’s oil among best globally