British exploration firm Tullow Oil is shifting its focus to the construction of infrastructure for tapping crude reserves in northern Kenya.
This follows more discoveries that have raised the estimated recoverable deposits in Turkana’s Lokichar basin to one billion barrels.
Tullow Oil announced on Wednesday it had found net oil pay of between 160 and 200 metres in Amosing-1 and of between 20 and 80 metres in Ewoi-1, both located in Block 10BB.
“We will now be working with the national and county governments with the aim of progressing both the upstream development and the associated export pipeline to project sanction in the period 2015 to 2016,” Tullow chief operating officer Paul McDade said in a statement.
The firm said that drilling results from the Ekales-1 and Agete-1 wells, both located on the same block, show that the Lokichar basin could have as much as 600 million barrels of oil.
“The results to date are extremely positive for achieving a commercial development from the discoveries made in this basin,” Mr McDade said.
The latest discovery is the seventh successive successful find by Tullow, which now estimates that the basin could have as much as one billion barrels of oil.
Petroleum experts said that at this stage the data only paints a vague picture of the basin but only drilling an appraisal well, which Tullow plans to do, can show vivid details.
“The shape you see may not be necessarily be what is in the ground,” Patrick Obath, the managing consultant of Eduardo and Associates, told the Business Daily.
He said that more analysis still has to be done to tell how much oil can be retrieved after sand and other impurities are sieved, but also added that there are good prospects based on Tullow’s marathon of drilling wells with positive finds.
Tullow said that it plans to drill an additional 20 wells in other oil blocks in the next two years. The Emong-1 well, adjacent to the Ngamia field and the Twiga South-2 appraisal well, both in Block 13T, are earmarked as the next drilling sites.
Tullow Jointly owns interests in Block 10BB with Canadian exploration firm African Oil. The two have opted not to carry forward the partnership to the next drilling stage.
Kenyan companies such as listed firm TransCentury, which recently got a two-year extension of its contract to provide infrastructure support for Tullow, are expected to be major beneficiaries of the new discoveries.
TransCentury is active in the oil, natural gas and mineral industries through its subsidiary Civicon, which has been constructing roads, landing pads and other supporting infrastructure for Tullow.
Regulatory filings by EHRC Energy, a Texas-based exploration firm, estimate that it costs $30 million (Sh2.6 billion) to drill a well and $10 million (Sh87 million) to carry out a seismic survey. Estimates are based on planned drilling for the block it owns in northern Kenya.
A frenzy of seismic studies and drilling is expected this year for which licensees have been raising cash and seeking financing partners over the past few months.
Simba Energy, EHRC Energy, Taipan Resources and Swala Energy have all announced deals that involve selling equity stakes in the past one month ahead of exploration.
The capital raising has been done to finance seismic studies and drilling, which are expected to take place this year.
Focus is also set to go to offshore drilling after Pancontinental Oil & Gas, an Australian listed firm, announcement that had begun drilling in the Lamu basin.
“The Sunbird-1 well is planned to take 50 to 60 days to drill to 3,000 metres below sea level, with an option to extend to 3,700 metres,” said Pancontinental chief executive Barry Rushworth in a statement. Drilling of the Sunbird-1 well is a joint venture with UK-firm BG Group.