An oil rig at Ngamia 1 in Turkana County. Africa Oil said that northern Kenya has commercially viable oil and gas reserves. FILE
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In a statement released on Tuesday, Africa Oil said that Northern Kenya has commercially viable oil and gas reserves.
Africa Oil is a joint exploration partner with Tullow Oil in some of the Northern Kenya wells with fuel deposits.
The firm estimated that the gross prospective resources or the best case scenario of how much oil the basin carries is 20.1 billion barrels.
Africa Oil, the Canadian company prospecting for petroleum in northern Kenya, has raised fivefold the estimated deposits in the Lokichar basin, affirming a recent report by British exploration firm Tullow Oil.
In a statement released on Tuesday, Africa Oil said that Northern Kenya has commercially viable oil and gas reserves. Africa Oil is a joint exploration partner with Tullow Oil in some of the Northern Kenya wells with fuel deposits.
“Based on the drilling and testing programme over the past year we have confirmed the South Lokichar Basin contains gross contingent resources of 368 million barrels of oil, an increase of 557 per cent,” said Africa Oil chief executive Keith Hill.
The company has rights to exploration blocks in both Kenya and Ethiopia. It said that the neighbouring country has a potential to produce 155 million barrels.
The explorer estimated that the gross prospective resources or the best case scenario of how much oil the basin carries is 20.1 billion barrels.
How much can actually be pumped out will, however, only be confirmed once the company carries out more tests, which it says will happen from next month.
“We continue to aggressively explore with three seismic crews active and are ramping up drilling activity with plans to have a total of six rigs (four operated by Tullow Oil) operating in the fourth quarter of 2013,” said the statement.
The company said that the region also has commercially viable natural gas reserves at 0.9 trillion cubic feet and similar to oil, the gross potential is higher at 2.2 trillion cubic feet.
Finer details on exactly how much oil and gas can be pumped out and if there are more reserves are expected by early 2015.
“We expect the next 18 months to be transformational as we drill out the prolific South Lokichar Basin and open up a number of highly prospective basins on the Tertiary rift trend,” said the statement.
Commercial viability will end a 50-year wait that has seen numerous drilling activity but none of which has yielded positive results.
“Of 33 wells drilled in the country prior to 2012, 16 showed signs of hydrocarbons, but none were considered commercial. Only four had been drilled offshore prior to 2012 and of these only one (in Block L5, drilled by Woodside in 2007) was in deep water,” said a 2013 report by consultancy firm Deloitte titled the Deloitte guide to oil and gas in East Africa: Where potential lies.
The last few years have, however, seen an increase in foreign firms prospecting for oil and gas in the region which has created opportunities for local firms that are offering support services.
It is estimated that Kenya could move to commercial production of oil by 2016. Plans for construction of refineries and jointly-owned oil pipelines with Uganda and South Sudan are underway to help in tapping the resource.
In a statement released last month, Tullow said the Turkana exploration basin had reserves in excess of 300 million barrels of oil after it discovered an additional 50 metres of reserves in Etuko-1, surpassing the commercial production threshold of 250 million barrels.
The British firm said the resources discovered were of a scale that would prompt discussions with the government and investors to kick off the development process.
A draft Bill for oil and gas mining is expected to be ready for debate by MPs in November to pave the way for investors keen on long-term ventures in the sector.
The revised law seeks to create a unit of National Oil Corporation of Kenya to regulate upstream operations of multinational firms that are currently involved in exploration.
The law also seeks to separate the roles for oil explorers, producers, distributors and retailers.
