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British petroleum company Tullow has discovered additional oil deposits in northern Kenya, moving the country closer to having commercially exploitable reserves.
Sources with knowledge of Tullow Kenyaâ€™s operations said the Twiga 1 South well, where exploration began mid this year, has yielded more than 30 metres of net payâ€™ deposits, 10 metres more than the initial discovery at the pioneer Ngamia well.
Twiga well, which Tullow co-owns with Africa Oil at 50 per cent working interests each, is in Lokichar sub-basin onshore Block 13T in North Western Kenya.
Tullow Oil was expected to announce the fresh discovery before the end of this month, but was delayed by a mechanical fault on the drilling rig, according to its partner, Africa Oil.
â€œAfrica Oil expects to announce drilling results from the Twiga South-1 well, currently being drilled in Block 13T, in early to mid-November,â€ the Canadian company said in a statement.
â€˜â€˜Announcement of these results has been slightly delayed due primarily to minor mechanical issues on the drilling rig, which have now been addressed,â€ said a statement to investors by Keith Hill, president and CEO of the firm that is listed on the Toronto Ventures Exchange.
The Business Daily has, however, learnt that the UK explorer has discovered â€˜data quality oilâ€™ at a depth of 2,337 metres against full depth of 3,600 metres.
â€œNgamia 1 was a super well at 100 metres of net pay and because the wells are close by, we should expect similar results,â€ said our source. â€œThis is the first time that Tullow has struck oil at this depth.â€
The source described the latest discovery as encouraging news and good progress towards confirming commercial quantities of oil.
â€œIt should also improve market share values for the investors and enable them raise more cash to develop the wells,â€ our source said.
Tullow expects higher quantities of oil at Twiga than it discovered at Ngamia 1, according to sources within the company and at the Ministry of Energy. The extent and the quality of the reservoir is yet to be determined.
The firm initially struck 20 metres of net pay deposits at Ngamia 1 but that gradually rose to between 104 metres and 143 metres of net pay as drilling continued in Block 10BB near Lake Turkana. The discovery was made at a depth of 2,340 meters.
Drilling at Twiga South-1 well, in Block 13T, is expected to continue to a total depth of 3,114 meters and targets the same structural layers and reservoirs as the Ngamia-1 oil well, which is located 23 kilometres to the south.
â€œTwiga South-1 well, represents the next step in expanding the play northward into the Lockichar basin and proving up the â€˜string of pearlsâ€™ concept along the main basin bounding fault,â€ Africa Oil said. Discovery of additional oil deposits is being seen as positive for Kenya even as the country awaits the official announcement next month.
â€œDrilling is ongoing at Twiga 1 but they have not issued a formal report to us ,â€ the Commissioner for Petroleum Martin Heya. Analysts described the discovery of 30 metres of net pay deposits as very significant for the Tertiary Rift but cautioned that it was prudent to wait for release of a proper report.
â€œWhen time is right and they have logged the well, they will issue a proper report. Oil finds are usually reported when the well has been drilled and logged,â€ said one industry analyst.
â€œThey did not handle release of the Ngamia 1 well discovery properly. Perhaps they are being careful based on the negative publicity that came with it,â€ said an industry analyst.
Tullowâ€™s manager for Kenya, Martin Mbogo, declined to respond to questions on the Twiga well.
The companyâ€™s spokesperson for Kenya, Anne Kabugi, was non-commital with the details but did not refute the information.
â€œWe have not made anything public yet,â€ Ms Kabugi said on telephone.
Tullow has operations on five blocks including 10A, 10BA, 10BB, 13T, 12A and 12B and is also a non-operated partner in off-shore block L8 where American oil exploration company Apache Corporation is the operator.
Tullow was on September 29 expected to start exploration at the Paipai-1 well located in Block 10A where drilling is planned to a total depth of 4,112 meters even as it tests Cretaceous and Jurassic sandstone targets.
Tullow Oil plc holds a 50 per cent working interest in the well while Africa Oil has a 30 per cent working interest in the Block.
Mr Heya said eight ultra-deep offshore blocks were gazetted by the minister for Energy in March, bringing to 23 the number of major explorers on Kenyaâ€™s 46 exploration blocks.
â€œWe have never discovered gas off shore but we are making good progress. Apache is continuing with Mbawa,â€ said Mr Heya.
Another US firm, Anadarko, will in late November begin drilling for natural gas in two wells in Lamu.
Exploration activity is taking place in both on-shore and off-shore blocks located in Kenyaâ€™s four major basins â€“ Anza, Lamu, Rift and Mandera with a view to discovering commercially viable deposits and reduce reliance on imported oil.
Kenya imports 3.6 million tonnes of refined petroleum products annually.
This is equivalent to a per capita consumption of 94.4 kilogrammes, which is still below the average for developing economies â€“ a development that has been attributed to slow economic growth and over dependence on rain-fed agriculture.