East Africa: Kenya Discovers Oil

Oil Discovery, East Africa

NAIROBI, March 26 (Reuters) – Kenya announced on Monday its first oil discovery, saying it was found in the northern part of the country where British Tullow Oil Plc has been conducting exploratory drilling. 

Mwai Kibaki, Kenya president

The announcement sent the Tullow’s shares higher.

Kenya and its neighbours in east Africa have become an international hot spot for oil and gas exploration after commercial oil deposits were found in Uganda and natural gas in Tanzania and Mozambique.

President Mwai Kibaki said in a statement read on live television that Tullow had established oil at more than 20 meters deep, and would drill more wells in the area to ascertain the commercial viability of the find.

“This is the first time Kenya has made such a discovery and it is very good news,” Kibaki said. “It is however the beginning of a long journey to make our country an oil producer, which typically takes in excess of 3 years.”

Tullow said in a statement issued in London it had been drilling the Ngamia-1 well on block 10BB, in the Lokichar basin which is part of the East African Rift System in Turkana County.

Shares in the company were up 2.5 percent after it said it had found oil in Kenya.

Tullow Oil operates Kenya’s block 10BB with a 50 percent working interest and Canada’s Africa Oil Corp., which holds the remaining stake.

The company said the Ngamia structure was the first prospect to be tested as part of a multi-well drilling campaign in Kenya and Ethiopia.

“Many leads and prospects similar to Ngamia have been identified and following this discovery the outlook for further success has been significantly improved,” the company said.

Tullow has confirmed 1.1 billion barrels of oil in Uganda and believes there are 1.4 billion left to find.

Tullow discovered oil in Uganda to the west of the country, along the border with the Democratic Republic of Congo, in 2006.

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Source: Reuters

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