Prospects for oil increase as Tullow drills deeper well
Tullow workers at a rig in Buliisa, Uganda. The firm says net pay encountered so far in Ngamia-1 is more than double that of other East African explorations. Photo/Esther Nakkazi
Kenya’s prospects of becoming an oil producer brightened after the government announced it had found more evidence that the recently discovered deposits are may be commercially viable.
At a press briefing on the on-going drilling of the Ngamia-1 oil well in Turkana, Prime Minister Raila Odinga said that the net oil pay had increased to 100m from the 26m announced on March 26 when the first discovery was announced.
Since then Tullow Oil, the UK-based explorer, has drilled 1,515m, up from 1,014m and found an encouraging 100m net oil pay with an API exceeding 30-degrees (light).
“The prospects are very good and we only hope that the next results will also be good,” said Mr Odinga.
He added that Uganda, which has commercially viable reserves, only had a net oil pay of 14m.
“The net pay encountered so far in Ngamia-1 is more than double that encountered in any of our East African explorations to date,” said Tullow Oil exploration director Angus McCoss in a statement.
Kenyans will, however, have to be patient for at least one more month before they could find out if the recent discoveries are commercially viable.
“We are drilling the remaining 1,000 metres and we will know in the next four or five weeks,” said Mr Odinga.
A total of about 2,700m is being drilled on the Ngamia-1 well.
The government is still guarded in optimism because even if the reserves are commercially viable, the journey from exploring to refining will take at least six years.
Energy minister Kiraitu Murungi said that the Petroleum (Exploration and Production) Act of 1986 had been overtaken by events and will be amended to make relevant.
“The law is outdated and it does not even recognise communities, which is a very strong element under the new Constitution,” said Mr Murungi.
Petroleum Focus director George Wachira said that updating laws and policies will open the door for investors who are more comfortable putting money where sound and clear policies are in place.
Tullow Oil is aiming for at least 300 million barrels of oil with its first two sites in an underdeveloped area that runs across the Kenyan border into Ethiopia. Should this happen it will justify the Lamu port project.
“Talk of the nearby Ethiopian oil blocks in which Tullow Oil has interests, further strengthens the case for future intra-state joint ventures for oil resource development that may also involve South Sudan in the future. This makes Lamu export port more and more viable,” said Mr Wachira.
Prior to this discovery, Kenya had not struck any oil or gas despite sinking at least 32 exploratory wells since independence in 1963.
Tullow and its partner, Africa Oil, have been drilling the Ngamia-1 well on block 10BB in the Lokichar basin since last year and had earlier said that focus would now shift to finding commercially viable reserves that could elevate Kenya into the respectable league of oil producers and attract a massive inflow of foreign investment.
The exploration firms said the Ngamia structure is the first prospect to be tested as part of a multi-well drilling campaign in Kenya and Ethiopia.
