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Nairobi - Tullow Oil's two new finds have moved Kenya closer to oil producer status but reaching that milestone requires developing fields in a remote region, constructing an export route and building local skills in a nation new to the business.
Britain's Tullow earlier doubled its estimate of discoveries to 600 million barrels in the Lokichar basin, an arid corner of the east African nation, which wants to put itself at the centre of a regional oil boom in the making.
There is probably much more oil there. Consultancy Wood Mackenzie says two onshore basins in Kenya and Uganda could have more than 4 billion barrels in addition to Kenya's existing reserves and the 1.6 billion already found in Uganda.
Popular impatience
Even before Kenya's latest finds, Tullow said the two nations could produce 500 000 barrels per day, which would boost Sub Saharan output by 8% from current levels of around 6.2 million bpd.
But cautionary tales abound that will encourage Tullow, an experienced African explorer, to tread carefully in drawing up its Kenyan plan, which it aims to have approved in 2015/2016.
The firm and its Kenyan partner Africa Oil halted work for two weeks last year when local protesters demanding more benefits ransacked a drilling site, exposing popular impatience for the spoils of the new industry.
Pipeline to coast
In land-locked Uganda, where Tullow also has acreage, wrangling over a refinery project has been blamed for delaying commercial production of oil found back in 2006, highlighting the political challenges that can stymie projects.
Catriona O'Rourke, senior analyst for Sub Saharan Africa at consultancy Wood Mackenzie, said: "Kenya is very exciting in terms of exploration and it is potentially not as complex as Uganda as they just need to build a pipeline to the coast.
First commercial flows through a planned pipeline could start in 2019, she said. "I think it will happen, as long as politics doesn't start slowing things down."Tullow has said production could start as early as 2016, but would have to be trucked out by road and rail at that stage.
There are, however, potential constraints beyond political tussles that may put a brake on progress.
Growing pains
Kenya, like other east African nations seeking to develop new reserves, has to learn a new business and for now has limited capacity to assess and approve the huge-scale projects that are needed to extract oil.
The 1 300 - 1 400km pipeline project to link Kenya and Uganda's oilfields with a new Kenyan port could cost $4bn - equivalent to about a fifth of projected state spending in the 2013/2014 budget.
Building those new skills will take time and may lead to policy missteps, said one oil executive in Nairobi.
"There are growing pains," he said.
But he said an oil pipeline, unlike building a new road or railway, would generate immediate and visible revenue, which could focus the minds of bureaucrats to speed up implementation.
