Companies

US company Marathon Oil joins Kenya exploration after acquisition deal

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US petroleum company, Marathon Oil, is set to join the Kenyan exploration industry after it signed a deal to acquire stakes in two blocks. Marathon Oil also plans to acquire a 15 per cent stake on block 12A in the Rift Valley presently controlled by Africa Oil and its British partner, Tullow Oil. Source: AfricaOil

US petroleum company, Marathon Oil, is set to join the Kenyan exploration industry after it signed a deal to acquire stakes in two blocks.

The Houston-based company said it had agreed to acquire a 50 per cent stake in block 9 in north-eastern Kenya presently held by Canada’s Africa Oil and subject to approval by the government.

Marathon Oil also plans to acquire a 15 per cent stake on block 12A in the Rift Valley presently controlled by Africa Oil and its British partner, Tullow Oil.

“Africa Oil will maintain operatorship in block 9 but Marathon Oil has the right to assume operatorship if a commercial discovery is made,” Africa Oil said in a statement.

Marathon Oil will pay Africa Oil an entry payment of $35 million which include prior expenditures and fund the Canadian firm’s working interests for the next three years at a maximum budget of $43.5million.

“We are very pleased to welcome Marathon Oil as a partner with their stature and long history of success in the oil and gas business,” Mr Keith Hill, Africa Oil President and CEO said.

The companies expect to drill an exploration well on Block 9 in the second quarter of 2013. On Block 12A, 2-D seismic acquisition is expected to commence in the third quarter of 2012.

“With this transaction Marathon Oil gains entry into an emerging onshore oil play in Kenya that offers potential across a vast acreage position and fits with our liquids-rich strategic focus," said Annell R. Bay, Marathon Oil's vice president of Global Exploration.

Exploration interest in Kenya has increased recently after oil and gas explorer Tullow Oil and its partner Africa Oil encountered huge potential reserves of oil in a well they are drilling in Block 10 BB.

Kenya and its neighbours in east Africa, as well as the Horn of the continent, have become a hotspot for oil and gas exploration in recent years, spurred by new finds in countries including Uganda, Tanzania and Mozambique.