Economy

New oil tests boost chances of striking commercial deposits

oil

An oil rig at Ngamia 1 where Tullow Oil Company discovered oil last year. Tests on the Twiga South-1 oil well have confirmed it could produce up to 5,200 barrels per day. Photo/FILE

Final test results from the Twiga South-1 well have boosted the country’s hopes of striking commercially viable oil reserves.

British exploration firm, Tullow and its partner Africa Oil said Thursday tests on the Twiga South-1 oil well have confirmed it could produce up to 5,200 barrels per day (bpd), nearly two times its earlier estimate, when aided by advanced pumping.

Tullow earlier this month predicted a total combined flow rate of over 2,850 barrels of oil per day for the Twiga South-1 well located block 13T in Turkana.

READ: Tullow eyes commercial oil production in Kenya

“These flow tests results at Twiga South-1 are an important step on the way towards understanding the commercial potential of the two discoveries we have made so far,” Angus McCoss, Exploration Director of Tullow Oil plc said Thursday.

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 wells each with capacities of above 10,000 bpd to fall in the league of oil merchants.

The exploration firms said a total of five tests were conducted on the Twiga South-1 well between January and this month.

“These results provide encouragement for the forthcoming testing programme at Ngamia-1A, Block 10BB, where four zones are planned to be tested from March and completed by the end of May,” the exploration firms said in a statement.

The Ngamia-1 well was drilled to a total depth of 2,340 metres and made a significant oil discovery of over 100 metres of potential reserves.

Analysts said the outcome of the tests planned for Ngamia-1 and others marked for drilling across the country would indicate Kenya’s chances of declaring commercial viability.

“A good number of wells are needed to give a summation of flows that can justify economic development of the project,” George Wachira, a consultant on petroleum said.

Kenya’s sole refinery in Mombasa has a design capacity to handle about 70,000 bpd against the country’s consumption requirement of 80,000 bpd, indicating the challenges ahead before declaring commercial viability.

The huge cost of investment required to construct wells, install pipelines and pump 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, analysts say.

Tullow and Africa Oil, however, remained optimistic of striking “good reserves” when planned tests and further drilling are concluded in Turkana.

Kenya and east Africa neighbours as well as the Horn of the continent have become a hot spot for oil and gas exploration in recent years, spurred by new finds in Uganda, Tanzania and Mozambique.

READ: Oil and gas discoveries make East Africa a rich hunting ground for global explorers

The last two have struck huge reserves of natural gas while Uganda is preparing to start commercial exploitation of deposits discovered around the Lake Albertine basin.