Lundin Petroleum signs production-sharing contract with Kenya

Oct 06, 2007 02:00 AM

The ministry of energy signed an oil exploration contract to be conducted in Anza Basin, west of Lake Turkana. Under the agreement, Lundin Petroleum of Sweden will explore the possibility of oil deposits in Anza Basin for the next four years.
Energy minister Kiraitu Murungi said Kenya is likely to be having oil after the discovery of oil and gas in the neighbouring countries.

Kiraitu said Kenya has remained largely unexplored although many oil exploration companies have shown interest in taking up the various blocks for oil exploration.
According to Lundin Petroleum Chief Executive Officer Charles Ashley, oil exploration carried out in 1980s in the area yielded hydrocarbons, which is an indicator of possible oil or gas deposits.

“Past exploration efforts dating back to the late 1980's have proven the existence of excellent quality, oil-prone source rocks, oil-saturated sandstone reservoirs, and a multitude of structural traps which remain undrilled,” the company said.
Lundin Petroleum will be the sole operator under the Block 10A Production Sharing Contract – PSC -- with the Kenyan Government having an option to participate with up to a 13-% interest following a commercial discovery.

Under the agreement, Lundin Petroleum will be the sole operator under the Block 10A Production Sharing Contract (PSC), with the Kenyan government having an option to participate with up to a 13 % interest in case of a discovery.
Nearby to the Lundin exploration block, energy giant Royal Dutch Shell said in the mid-1980s there were signs of oil deposits in Erie Springs on the shores of Lake Turkana. Although Royal Dutch Shell abandoned the effort after running out of funds in 1992, Kenyan authorities continued to believe the prospects for finding oil in the region were good.

Last year, the state-run China National Offshore Oil Corporation (CNOOC) signed an agreement to look for oil in the country's Indian Ocean waters, covering six blocks covering 115,343 sq km (44,534 sq miles).
Kenya currently imports most of its oil from Sudan.

Source: Kenya Broadcasting Corporation
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