Gulf Energy E&P BV has contracted a state‑of‑the‑art onshore oil rig from the Middle East, to deliver first oil from Kenya’s South Lokichar Basin by year‑end 2026.
Strategic Rig Acquisition
The company has secured the GW70 rig, valued at more than US$15 million, from Great Wall Drilling Company (GWDC) in the United Arab Emirates under a long‑term lease. Logistical arrangements are underway to ship the rig from Abu Dhabi to Mombasa by June, ahead of commissioning and acceptance checks.
Chairman Francis Njogu confirmed the rig will operate under a performance‑based model, with GWDC responsible for delivery, commissioning, and operations. The arrangement also includes skills transfer to Kenyan engineers and technicians.
Government Oversight
A high‑level delegation from the Government of Kenya, the State Department for Petroleum, the Energy and Petroleum Regulatory Authority (EPRA), and the Turkana County Government recently inspected the rig in Abu Dhabi’s Al Dhafra region.
Turkana officials, led by County Secretary Dr. Amb. Richard Ekai and Director for Climate Change George Emase, described the inspection as “enlightening and productive,” noting the rig met industry safety and performance standards.
The inspection follows the First Addendum to the PSC, signed in November 2025, which:
- Redesignated Block 13T to Block T7.
- Increased cost recovery oil allocation from 65% to 85%.
- Updated fiscal terms, including exemptions from VAT, railway levy, and withholding tax for petroleum operations.
- Strengthened government oversight by replacing references to “Minister” with “Cabinet Secretary.”
This legal framework underpins Gulf Energy’s investments and sets the stage for the US$6 billion Field Development Plan (FDP) ratified by Parliament.
Rig Capabilities
The GW70 rig, with a 1,500 horsepower capacity, has previously delivered projects for Abu Dhabi National Oil Company (ADNOC) and boasts a strong record of efficiency and safety. Gulf Energy expects drilling to commence in early July, following procedural checks.
Njogu emphasized: “At Gulf Energy, it’s all systems go in the journey to deliver first oil by December 1st this year.”
Economic Impact
Kenya projects significant fiscal gains from South Lokichar’s oil development. Government estimates suggest potential earnings of USD 1.05 billion at $60 per barrel and up to USD 2.9 billion at $70 per barrel equivalent to KES 136 billion to KES 371 billion over the life of the project.
