Mandera oil firm to continue prospecting as price falls
An oil rig at Ngamia 1 in Turkana County. Crude prices have fallen to as low as $59 a barrel, below the $90 per barrel analysts say is needed to make Kenya’s oil and gas industry viable. PHOTO | FILE
What you need to know:
Simba Energy, which is exploring Block 2A in Mandera, said it will begin seismic work by March next year.
The results will pave the way for drilling of an oil well.
Tullow Oil, ERHC, Camac and Swala Energy are the other oil and gas explorers who have announced they will stick to their programmes despite the price of oil hitting five-year lows.
Simba Energy, an oil and gas explorer, has joined a growing queue of oil firms proceeding with prospecting despite fears of falling oil prices slowing the industry.
The listed Canadian firm exploring Block 2A in Mandera said it will begin seismic work by March next year. The results will pave the way for drilling of an oil well.
Simba chief executive Robert Dinning said while the explorer is looking for partners who will come up with finances and technical skills needed to carry out further work, seismic work will go ahead as scheduled.
“While we have been actively negotiating with numerous parties who have expressed interest in a farm-in to Block 2A, the technical team has finalised a programme to acquire up to 400 kilometres of 2D seismic designed to target drilling locations on prospects and leads in two basins, and also yield volumetrics that will support revised resource estimates,” said Mr Dinning in a statement.
“The company expects to sign a contract and commence the initial 2D seismic programme in the first quarter of 2015.”
It was initially thought the falling oil prices would freeze development of Kenya’s nascent oil industry.
Crude prices have fallen to as low as $59 (Sh5,335) a barrel, below the $90 (Sh8,140) per barrel that analysts say is needed to make Kenya’s oil and gas industry viable.
Tullow Oil, ERHC, Camac and Swala Energy are the other oil and gas explorers who have announced they will stick to their programmes despite the price of oil hitting five-year lows.
Swala, an Australian oil explorer cross-listed at the Dar-es-Salaam Stock Exchange, in the meantime said it had secured $2.5 million (Sh226 million) through issuing convertible notes.
Swala Energy said part of the cash will be used to finance exploration work on its Block 12B in the Nyanza region.
“The funding agreement will enable Swala to further advance its work requirements on its current licenses, complete the current work programme, and fund general and administrative costs.
The work on the current licences will include the preparation for drilling of Blocks 12B, Pangani and Kilombero (both in Tanzania),” said Swala in a statement.
Swala chief executive David Mestres Ridge also announced it had settled a case with CEPSA of Spain over a disputed 25 per cent stake in Block 12B. Dr Ridge said CEPSA had returned the 25 per cent earlier acquired giving Swala a 50 per cent stake in the block. Tullow owns the remaining 50 per cent stake.
“We are pleased at the amicable resolution of the issues that arose in respect of Block 12B, which allows us to focus on the operational development of 12B ahead of a planned drilling campaign in 2015,” said Dr Ridge in a statement.
Firms have said that they will concentrate on areas with higher chance of finding good results and on onshore blocks.
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