Markets & Finance

Oil explorer Zarara says to begin Lamu drilling in early 2017

oil rig

An offshore oil platform: Zarara Oil and Gas Company revealed it intends to drill 102 wells in Lamu East Subcounty. FILE PHOTO

A multi-billion shilling exploration project is expected to begin in Lamu County in March next year after seismic surveys confirmed a 400-kilometre stretch on Pate Island contains gas deposits.

The surveys by Zarara Oil and Gas Company, a fully-owned subsidiary of Midway Resources International (MRI), were conducted in L4 and L13 blocks on Pate Island.

Addressing residents at Faza Town on Sunday, Zarara representative Mr Peter Nduru revealed that the firm intends to drill 102 wells, adding that so far Sh 1.1 billion had already been sunk into the survey conducted between 2012 and 2013.

"Between 2013 and 2014, we were dealing with data processing and data interpretation. Indications show that there could be gas. Until drilling is done we cannot prove the quantity," said Mr Nduru.

The firm is now awaiting approval from the National Environment and Management Authority (NEMA) after submitting a Environmental Impact Assessment (EIA) report to the watchdog.

“We plan to begin drilling by March, 2017 after the due process is complete," said Mr Nduru.

The exploration firm indicating that while it was primarily drilling for gas, it also hoped to find oil deposits.

Leaders support move

Lamu County leaders, including governor Issa Timamy, have welcomed the move by Zarara, assuring the company of maximum cooperation.

He however asked the project's investors to ensure they sign a memorandum of understanding (MoU) with the county government.

“If the EIA report is ready after NEMA, the Lamu County leadership and even the locals here in Lamu East will need to be fully involved," said Mr Timamy.

“Before exploration begins we need to have an MOU to agree on how employment will be arranged for locals. The company should also think of giving education requirements required for residents to get employment opportunities,” he added.

Lamu East MP Athman Shariff Athman said they would cooperate with the company to ensure they get approvals required to do exploration.

“We want the company to pick youths and train them in their departments by giving them scholarships," he said.

The national government had granted Zarara an 18-month license extension that will run to June 2017 for the L4 and L13 blocks.

READ: Oil explorer Zarara plans to drill Lamu block within a year

The firm is seeking to use resources extracted from the blocks to generate up to 1000 megawatts of power towards increasing energy supply demands at the Lamu Port South Sudan Ethiopia Transport Corridor (Lapsset) project.