Apache Corp abandons hunt for hydrocarbons in Kenya
An offshore oil and gas exploration rig. Apache Corp is relinquishing its 50 per cent stake in Kenya's offshore L8 Block where it partnered with Britain's Tullow Oil and Australia's Pancontinental Oil and Gas. Photo/FILE
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American explorer Apache Corp has abandoned its hunt for hydrocarbons in Kenya after finding only non-commercial quantities of gas in its sole Kenyan interest
Bob Dye, senior vice president of corporate affairs at Apache, said the company was relinquishing its 50 per cent stake in Kenya's offshore L8 Block
Other companies that own exploration blocks or are prospecting for oil and gas in on the Kenyan coastline include FAR Limited, Pancontinental Oil and Gas and Tullow Oil
American explorer Apache Corp has abandoned its hunt for hydrocarbons in Kenya, a hotspot in the race for new oil and gas deposits, after finding only non-commercial quantities of gas in its sole Kenyan interest.
Bob Dye, senior vice president of corporate affairs at Apache, said the company was relinquishing its 50 per cent stake in Kenya's offshore L8 Block where it partnered with Britain's Tullow Oil and Australia's Pancontinental Oil and Gas.
"We determined that other areas in our worldwide portfolio provided better opportunities for future capital investments," Dye told Reuters in an email late on Tuesday.
Dye said Apache had informed the Kenyan government of the move on Sept. 27. The decision, he said, was not influenced by a militant attack on a Nairobi shopping mall a week earlier which killed at least 67 people.
The attack, the worst on Kenyan soil since the 1998 U.S. Embassy bombing carried out by al Qaeda, has raised questions over the security of oil and gas exploration facilities.
Commercially viable oil discoveries in Kenya, along with oil struck in Uganda and gas finds offshore Tanzania and Mozambique, underlines east Africa's potential to become a major oil and gas producing region in the next five years.
Other companies that own exploration blocks or are prospecting for oil and gas in on the Kenyan coastline include FAR Limited which is listed on the Australian Stock Exchange.
In June this year, FAR Limited and Pancontinental announced that they are seeking to sell part of their exploration rights on a block off the coast of Kenya, to raise funds that will be used in drilling.
FAR Limited owns 60 per cent of block L6, which has three prospects; Tembo, Kifaru and Kifaru West, while the remaining 40 per cent of the joint venture is owned by Pancontinental.
FAR, in disclosures contained in its latest annual report for the period ended December 2012 said that the combined prospective resources for the L6 block have been assessed at 3.7 billion barrels of oil or 10.2 trillion cubic feet of gas.
The company said that Tembo, Kifaru and Kifaru West have prospective resources of; 327, 178 and 130 million barrels of oil respectively or 807, 517 and 388 billion cubic feet of gas.
The cost of prospecting and drilling can run into millions of dollars and chances of striking oil or gas are usually low.
FAR Limited had assessed the chances of a discovery of the three prospects to be 21 per cent, 19 per cent and 18 per cent respectively.
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