Tullow expects new oil discovery in Kerio Valley aerial survey
Workers at a Tullow oil rig in Turkana: The firm expects an airborne survey in the Kerio Valley basin to confirm oil finds. PHOTO | FILE
British exploration firm Tullow Oil says it expects an airborne survey in the Kerio Valley basin to confirm oil finds outside its South Lokichar blocks.
The result from the basin opening Cheptuket-1 well in the Kerio Valley’s Basin in Block 12A was announced in March 2016 which showed that the company encountered good oil shows across an interval of more than 700 metres.
The post-well analysis is still in progress and Tullow has begun conducting a Full Tensor Gravity Gradiometry (FTG).
“An FTG survey over Block 12A commenced earlier this month to gain further data on this prospective area. Further exploration activities in Block 12A and Tullow’s other remaining unexplored Kenyan acreage, continue to be evaluated,” the company said in a half-year results announcement made Wednesday.
Tullow says ongoing evaluation of its South Lokichar Basin in the first half of 2016 led to an upgrade of the find up to 750 million barrels of oil (mmbo).
The company is bullish on its findings at the South Lokichar Basin, saying its potential may increase the resource estimate to around one billion barrels of oil.
Tullow has not yet started producing oil in Kenya although it intends to launch the Early Oil Pilot Scheme to produce a gross of 2,000 barrels of oil per day when the pilot scheme commences mid next year.
The company says it is continuing to put money in exploration and appraisal campaign, which is set to re-commence in the fourth quarter of 2016.
According to the half year report, the firm’s capital expenditure for the six months to June amounted to $589million (net of Norwegian tax) with $561 million invested in development and $28 million in exploration and appraisal.
“More than 85 per cent of the total was invested in Kenya, Ghana and Uganda and 94 per cent was invested in Africa,” the report read.
The oil explorer is, however, expecting the West African TEN Project to deliver 90,000 barrels of oil per day by next month — its first delivery oil since the company started the project three years ago.
The firm has, however, made a profit after tax of $30 million in the first half 2016 although it earned lower revenues on prior year as a result of lower commodity prices and reduced Jubilee production.
The oil explorer noted that the low performance was partially offset by significantly lower costs and write-offs.
Tullow expects to make estimations of the technical requirements as well as rough investment cost for the project for both the upstream and pipeline early next year.
“Tullow intends to continue to progress the technical, environmental and social studies and to conduct tenders required to proceed to both FEED studies,” the report said.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
