Commodities

Kenya to auction Lamu oil blocks within a year

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A section of Lamu Island. FILE PHOTO | NMG

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Summary

  • Kenya will auction new oil and gas exploration blocks in the Lamu Basin on the Indian Ocean territory within a year as the country looks to attract new investment in the petroleum sector.
  • Petroleum and Mining Principal Secretary Andrew Kamau said the offshore blocks will be put up on offer after collection of seismic data by US-based ION Geophysical Corp.

Kenya will auction new oil and gas exploration blocks in the Lamu Basin on the Indian Ocean territory within a year as the country looks to attract new investment in the petroleum sector.

Petroleum and Mining Principal Secretary Andrew Kamau said the offshore blocks will be put up on offer after collection of seismic data by US-based ION Geophysical Corp.

The American firm has been contracted by the Ministry of Energy to carry out two seismic surveys in the Lamu Basin over the next one year.

"We expect to go into a bidding round after we have the data after a year. They (ION) will recoup their costs after the bidding," said Mr Kamau.

ION said earlier that the work in the Lamu Basin will cover around 14,000 square kilometres.

Prospecting companies have drilled 13 offshore exploration wells in the area but without a commercial discovery as yet.

Mr Kamau added that the blocks to be put up for auction are not in the disputed region claimed by Somalia.

Somalia's government had earlier accused Kenya of awarding offshore oil and gas exploration blocks illegally to two multinationals, alleging the concessions lie in waters it is claiming as its territory.

The disputed area is about 100,000 square kilometres and is said to contain hydrocarbon reserves.

Investor interest in Kenya's hydrocarbons potential has been growing since Kenya's first major oil discovery in March 2012 in the Turkana region.

Oil and gas explorers use seismic surveys to produce detailed images of the various rock types and the location beneath the earth’s surface and to determine the location and size of potential oil and gas reservoirs.

Kenya has four petroleum exploration basins including Lamu. The others are Anza, Mandera and Tertiary Rift Basin.