Firms intensify search for oil and gas

Two major exploration firms on Wednesday confirmed they would drill test wells in Kenya this year, boosting the country’s hopes of striking oil or gas deposits.

Britain’s Tullow Oil said preparations were complete for drilling on the Ngamia 1 exploration block near Lodwar.

“Surveys in Kenya and Ethiopia have been completed. Ngamia 1 well in Kenya is due to spud imminently,” Tullow said in a statement on Wednesday.

Australia’s Pancontinental Oil and Gas also announced it had concluded the acquisition of seismic data on block L10A and L10B off the coast of Lamu and would soon sink a well on another block, L8, in which it holds interests.

It said interpretation and mapping of the data will be completed later in the year, helping map a number of prospects prior to drilling.
“Pancontinental believes that it has identified an oil-prone “sweet spot” offshore Kenya and this will first be tested by drilling on the giant Mbawa Prospect in L8,” Barry Rushworth, Pancontinental CEO said on Wednesday.

Kenya has no proven oil reserves, but interest in the hydrocarbon potential of the east African region has shot up in recent years after gas discoveries in Tanzania and Mozambique and billions of barrels of oil in Uganda

The Ngamia-1 that is marked for drilling by Tullow falls within block 10BB near Lodwar.

Tullow Kenya BV is the operator of five exploration blocks in northern Kenya following deals last year in which it signed agreements with Africa Oil and Centric Energy to gain a 50 per cent interest in five Kenyan licences; Blocks 10BA, 10BB, 10A, 12A and 13T.

With partners, Pancontinental holds exploration licences for four blocks—L10A, L10B, L6 and L8—off Lamu, along the south coast.

The Australian firm’s joint partners in L10A and L10B include BG Group Plc, Premier Oil Investment and Cove Energy Plc.

The Australian firm’s joint partners in L8 include Apache Corporation, Origin Energy Limited and Tullow Kenya B.V.

Mr Rushworth said plans for drilling on the Mbawa prospect within block L8, which was recently farmed-in to Tullow Kenya B.V, a wholly owned subsidiary of Britain’s Tullow Oil, were at an advanced stage.

“Mbawa has potential to contain more than 4.9 billion barrels of oil, although this can only be verified by drilling,” the CEO said.
In December, Pancontinental announced it will raise $15 million through a cash call to fund its exploration activities in Kenya and Namibia and boost working capital.

The offshore East African margin, including Kenya, has become an international hot spot for oil and gas exploration. A number of recent major gas discoveries offshore Mozambique and Tanzania have led to a significant increase in exploration activity.

French multinational Total in September joined the scramble for opportunities on the Kenyan coastline and announced plans to acquire stakes in key blocks off the coast of Lamu, strengthening a comeback by giant firms eyeing opportunities in Kenya’s oil exploration business.