Kenya sees renewed interest in oil exploration

Dec 20, 2004 01:00 AM

There is renewed interest in oil exploration in Kenya, amid reports that oil could be struck in the Lamu Basin.
An official of an Australian company which is carrying out exploration was confident that Kenya could hit "abundant" oil and gas reserves in the North Coast.

This is not the first time a foreign company has come up to claim there is oil in Kenya. Twenty years ago the Government in collaboration with an Italian company built the Malindi jetty, which was to be used to explore the area for oil. The jetty, which had cost more than Sh 100 mm, was abandoned before completion for unknown reasons.
For many years the Government went quiet about oil until three years ago when exploration was revived.

Speaking aboard MV Furgo after two weeks' exploration, the source said Kenya could start exploring possible oil wells next year if it uses improved technology.
"Lamu is an area of high interest because there is a possibility of striking gas and oil if improved technology is used," thesource said. After weeks out in the deep seas, 30 to 40 miles offshore, fresh data tended to point to a high possibility of oil deposits, the source said.

Another official aboard the ship said they had given the Government the information they had collected for it to decide when the possible oil wells could be explored.
"We have explored bases of rocks underneath the water and there is a possibility of striking oil," said the oil expert. He said the firm would carry out additional studies to decide where to drill. The Australian official was speaking after the most recent study. The ship is heading for Australia.

The Government remains guarded, with top Energy ministry officials merely saying that the decision by the Australian company to pump in an additional Sh 3.7 bn ($ 46 mm) into the project was a good sign.
"There are obviously good prospects, otherwise why would they spend this additional money if they were not sure of getting reasonable deposits of oil?", Energy Permanent Secretary Patrick Nyoike said. He was referring to a decision by Australian oil-exploration firm, Woodside Energy, to invest additional funds in the search for the black gold soon after studies showed Kenya could have exploitable deposits.

A circular from the East Africa Community (EAC) Secretariat recently revealed that the extensive 2-dimension seismic data recently gathered by Woodside off the Lamu Basin had revealed an active petroleum system. It said following the findings, plans were underway to acquire 3-dimension seismic data in selected areas in 2005 in preparation for drilling in 2006. However, Nyoike ruled out 3-D studies, saying drilling would begin mid next year.
Woodside carried out an extensive seismic investigation of the area and studies had confirmed the possible presence of oil deposits, according to the EAC report. Other areas where oil is thought to exist are Anza, Mandera and the tertiary Rift with several international oil companies already expressing interest in the open blocks.

The three East African partner countries of Uganda, Tanzania and Kenya have increased promotion of oil exploration in the region, emphasizing that the countries provide an investment environment with low entry costs and large areas open for licensing.
The EAC said the region was still seriously under-explored and had the potential of becoming a significant producer of both oil and gas in the near future. Former Energy Minister Ochillo Ayacko first raised the hopes of Kenyans having access to commercially viable deposits at the Coast following early indications from the Australian firm. He, however, told Kenyans to wait for comprehensive data interpretation later this year.

Ayacko said ongoing exploration processes at the Coast had renewed hope that the country had exploitable oil deposits. Kenya, he added, shared the same rock formation with Sudan, Cameroon and Chad, all of which had shown signs of having huge deposits of high-yielding oil.
National Oil Corporation (NOCK) managing director Mary M'Mukindia had said the Australian oil exploration giant covered seven exploratory blocks, adding the firm had licensed another company -- Dana -- to prospect for oil at the Coast. Oil frequently has a destabilizing effect on Third World countries.

Source: The East African Standard
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