Kenya: Oil Expectations Rise in 2013
By Solomon Kirimi, 28 December 2012
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Kenya has no confirmed oil deposits yet but the year 2012 will remain the best for Kenya's quest to join the league of oil producers.
For a country which a year ago had no reason to think of ever becoming an oil producer, two wells at appraisal stage in Northern Kenya and gas finds at the coast is exciting.
It all started on March 26th of 2012, with the announcement that Ngamia-1 oil well in Lokichar area of Turkana in the Rift Basin had 20 metres of net oil pay.
Tullow Oil made the announcement that the Ngamia-1 exploration well, located in Block 10BB, had then been drilled to a depth of 1,041 metres, within which light waxy crude was discovered.
"This is an excellent start to our major exploration campaign in the East African rift basins and to make a good oil discovery in our first well is beyond our expectations and bodes well for the material programme ahead of us," said Tullow Exploration Director Angus McCoss, We look forward to further success as seismic and drilling activities continue to gather pace."
Two months later the Ngamia-1 well encountered oil and gas shows over a gross interval of 140 metres from a depth of 1,800 metres to 1,940 metres.
"God can not be so unfair to give our neighbor oil and gas and leave Kenya with nothing," energy minister Kiraitu Murungi said in reference to oil discoveries in Uganda, huge gas deposit find in Tanzania and the already oil producing Sudan.
The discoveries by Tullow suddenly the interest in exploration of in Kenya were revived just over a half a year after being dampened by the exit of Chinese explorer CNOOC from Isiolo in October 2012 after finding just traces of gas.
The Isiolo Boghal-1 well in block 9 well was plugged and abandoned because the gas was deemed to be of no commercial value.
"If the gas was of commercial value, Kenya would have received a lot of interest for exploration blocks," The then discouraged Energy permanent secretary Patrick Nyoike said.
CNOOC had sunk $26 million (Sh2.2 billion) to drill the well to a depth of 5,085 metres and quit before reaching 5,556 metres initial target.
CNOOC partner in the initial venture African Oil have now partnered with Marathon Oil to re-open the well following the successes by Tullow oil up north.
The lucky streak by Tullow oil followed them offshore to Mbawa1 in Lamu basin where 50 metres of net gas pay was found.
Tullow is a minor shareholder in the block L8 with Amerca's Apache corporation, Austalia's Pancontinental. Although the gas find was not of commercial value and was plugged, this increased the appetite for explorers with prospects looking good for presence of oil and gas of the Kenyan coast.
Tullow Oil's good run of results followed them to Twiga South-1 exploration well in Block 13T where in late November they encountered oil, confirming a rush announcement by partners Africa Oil Corp on October 26 2012.
Tullow Oil plc announced that the Twiga South-1 exploration well drilling had encountered 30 metres of net oil pay. A further potential of a gross interval of 796 metres net pay is to be assessed before being declared.
The finds have now moved Kenya from a high risk exploration country to high value target for world majors looking for a piece of the action in a region promising to be latest exploration frontier