CNOOC steps up search for oil as deadline looms

When successful, the company is allowed to use the money from produced oil to recover capital and operation expenses .

The balance is shared between the government and the company –mostly at a rate of about 80 per cent government and 20 per cent for the company.

In some cases, changes in international oil prices or production rate can affect the company’s share of production.

PSCs are beneficial to countries that lack expertise and or capital to develop their resources and wish to attract foreign companies to do so.

They can be very profitable for the oil companies involved, but often involve considerable risk.

When the state-owned National Oil Corporation of Kenya (Nock) was formed in 1981, part of its mandate was to facilitate and participate in the exploration and exploitation of petroleum resources, on behalf of the Government.

Nock also keeps all rock samples from the 31 wells already drilled, 19 of which have shown hydrocarbons.

The samples are key to attracting investors to take up Petroleum Sharing Contracts (PSC’s) in the country’s acreage with oil and gas potential.

This week, Nock announced that it plans to set up a centre to assess source rock potential for oil and gas.

“To be able to achieve this National Oil will acquire some state of the art equipment and technical support in a geochemical laboratory,” said Mr. Nyaga.

The company has recently progressed on the second and final stage of the exploration exercise in Block 9 in the Anza Basin- in Northern Kenya.