Kenya inches closer to viable oil output with Turkana well

First test results from the Ngamia-1 well have boosted the country’s hopes of striking commercially viable oil reserves as explorers prepare to conduct further studies within the same basin.

British exploration firm Tullow and its partner Africa Oil said Monday tests on the first conduit of the Ngamia-1 well produced 281 barrels per day (bpd) when aided by advanced pumping equipment.

The explorers plan to drill and test another five branches on the same well that lies on Block 10BB.

“The results from the first flow test at Ngamia are also very encouraging and prove the first potentially commercial flow from the Lower Lokhone reservoir section. The remaining tests in the Auwerwer reservoir units will give us a fuller indication of Ngamia’s production potential,” said Angus McCoss, Tullow exploration director.

In February, Tullow and its partner announced that tests on the Twiga South-1 well, which falls within the same basin, could produce 2,812-5,200 bpd when aided by advanced pumping equipment. This was nearly double earlier prediction.

(Read: Tullow eyes commercial oil production in Kenya)

Analysts said the discovery of oil flows in multiple wells within a common basin would help give an indication on Kenya’s chances of declaring the commercial viability of its oil reserves.

The huge cost of investment required to construct wells, install pipelines and equipment to move the oil to the market also dictates the size of reserves a nation may have to find before venturing into commercial production.

Data from oil wells such as Kingfisher-1 and Kingfisher-2 that have been considered commercially viable in Uganda showed that Kenya may require multiple discovery of wells each with capacity of above 10,000bpd to fall in the league of oil merchants

Meanwhile Uganda, France’s Total and China’s CNOOC have agreed to build a small oil refinery in the east African country, Uganda’s government said, in a step towards resolving disagreements that have delayed commercial oil production.

They agreed on an initial processing capacity of 30,000 barrels per day, well below the 200,000 bpd the government had initially sought.

Explorers struck oil in Uganda in 2006 but wrangling over taxes and the viability of a local refinery have stalled production. President Museveni stressed that he wanted a final deal that would include the construction of a pipeline to Kenya for exports.