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More oil and gas discovered, raising Kenya’s energy profile

An aerial view of a Tullow oil rig in Turkana County. A Canadian exploration company, Africa Oil, and its partner, Tullow Oil Plc, Tuesday announced fresh discoveries of oil and natural gas in the Ngamia-2 well, in Turkana.

An aerial view of a Tullow oil rig in Turkana County. A Canadian exploration company, Africa Oil, and its partner, Tullow Oil Plc,

More oil and gas has been discovered in Kenya, raising the prospects of turning the country into an oil and gas producer.

A Canadian exploration company, Africa Oil, and its partner, Tullow Oil Plc, Tuesday announced fresh discoveries of oil and natural gas in the Ngamia-2 well, in Turkana.

The well is located 1.7 kilometres from Ngamia-1 where the maiden discovery was made in March 2012.

Africa Oil also announced a gas discovery at block 9 in Marsabit, which it operates jointly with Marathon Kenya Oil Limited.

According to a statement from the firm, the Sala-1 well was drilled to a total depth of 3,030 metres.

A third party independent assessment of the larger Bogal area, which covers up to 200 square kilometres, revealed that it could be containing up to 1.8 trillion cubic feet of gas which experts said was significant.

“Africa Oil is pleased to announce it has made a gas discovery in Block 9 onshore Kenya,” the firm’s CEO, Keith Hill, said in note to shareholders.

Bogal-1 well was abandoned in 2010 by Chinese state-owned explorer, CNOOC, after it encountered no oil.

The announcement comes a week after British Gas Group announced the first offshore (deep water) oil discovery in Lamu’s block L10A which it operates jointly with Australia’s Pan Continental and Thailand’s PTTEP.

The new discovery added to the Turkana finds which have already been assessed to be commercially viable with the government preparing to start production by 2018.

The ministry of Energy is preparing to issue an international tender for the construction of a crude oil pipeline connecting the Turkana oil field with Lamu port.

The pipeline has a completion date of 2016.

According to Africa Oil, drilling of Ngamia-2 well encountered up to 39 metres of oil and 11 metres of natural gas.

The well has been suspended to allow testing and the rig will be used to drill four other appraisal wells in the area.

At the same time, Africa Oil announced that testing operations on the Agete-1 well in block 13T had been completed with results indicating a flow rate of 500 barrels of oil a day.

Tullow discovered 100 metres of oil at that well last November.

“The success of the Ngamia-2 exploratory appraisal well builds on our major basin opening discovery well, Ngamia-1.

The reservoirs were of similar quality and the well will be suspended for testing. With five rigs drilling in Kenya and Ethiopia, there is much to look forward to in the second half of the year,” said Angus McCoss, Tullow’s exploration director.

Kenya has not made “significant” discoveries of natural gas as has been the case with oil. In 2012, drilling of the Mbawa-1 well in block L8 by Apache encountered only 52 metres of gas at a total depth of 3,275 metres.

At the time, Apache operated the block together with Tullow Oil (15 per cent), Pancontinental (15 per cent)and Origin Energy (20 per cent).

An announcement of the discovery by Pancontinental sparked a spat between the firm and the Energy ministry as the former was said to have not adequately briefed the ministry of the find before making the announcement.

Exploration companies prefer oil to natural gas as it leaves a wider margin to recoup exploration costs. Kenya is yet to develop a framework for licensing exploration for natural gas.

The British firm says it has commenced development studies and is expected to submit a plan to the government showing how it intends to extract the oil by the last quarter of next year.

A proposed crude oil pipeline between Lokichar and the proposed Lamu port is expected to be set up by 2019 to aid oil export once production starts.

On Monday, energy cabinet secretary Davis Chirchir said that the government will soon advertise for a lead consultant to carry out feasibility studies for the pipeline which is expected to be ready by 2019.

President Uhuru Kenyatta has urged Turkana residents to convert their land into equity in the pipeline to earn dividends and secure a long term source of revenue.

-Nation

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