Writes Leo Odera Omolo
Kenya, an African nation whose economic mainstay has for many year depended largely on agriculture with no sign of mineral resources is now edged close to joining the league of the oil producing nations following the latest announcement made by the Tullow, the British oil exploration company that it has made more discovery of substantial oil deposits at a second well in the Northern part of the country.
Long regarded by the big explorers, as frontier market, the second discovery by Tullow is now expected to generate ever greater interest in oil exploration in the country-even as companies are expected to start drilling early next year.
Tullow said in a statement that the discovery was made following successful drilling of the new well to the intended depth of 3,250 meters.
According to the announcement the well also holds potential for more oil that will be established once the planned testing to determine the exact amounts of oil in the well is complete. The tests are scheduled to take place in the next two months.
The British oil firm announced that the Twiga South-1 exploration well has encountered 30 meters of neat oil pay with further potential to be assessed on test. A series of flow tests will now be conducted on the well over the 4-8 weeks’” read Tullow’s statement in part.
While making the announcement, the company also said that it will be going back to its first well,Ngamia-1 located on Block 10818 in Turkana County where it made its first discovery in March this year, f to carry out tests in order to establish the quantities of deposits at the well.
Drilling at the Ngamia-1 well was suspended mid this year following what the oil exploration firm Tullow PLC termed as an encounter with an unexpected rock, structure that prevented further drilling at the well.
At the time of the suspension, Tullow announced that it had encountered 143 meters of net oil pay at the well with data indicating that the well could be holding more potential should it b dug to the full depth.
So far Tullow Oil Plc has drilled three wells in Kenya including the Paipai well located on Block 10A whose results are expected by the end of the year. Of the three, two have ended up in discovery.
Since the March announcement that Kenya had struck oil, the country’s oil exploration space have generated interest from leading international oil exploration firms with the data from the Ministry of Energy showing that all the 47 blocks have already been licensed to the various exploration companies.
The demand for licenses to explore in the local oil blocks has also been accelerated by the announcement of a discovery of natural gas in Block 1.8 in Lamu Basin by Apache Corporation which operates the block jointly with Origin Energy Pan-continental Oil and Gas and Tullow Kenya B.V.
However, in just 24 hours after making the announcement, Apache Corp came under the spotlight following what the Energy Ministry termed as malpractice in making its discovery public by the failure to adequately brief the government of the natural gas find before making the announcement.
The announcement by Tullow earlier this week now placed Kenya closer to becoming an oil producing nation which is hoped to provide great relief to the strained current a count and ease fuel-based inflation that has thrived as a result of a huge oil import bill.
Meanwhile newspaper reports emerging from the Ugandan capital, Kampala say the future of Tullow Oil Plc in Uganda still hangs in the balance, as the Irish Oil prospecting firm is reported widely to be temporarily frustrated by the lack of progress on arriving at “a final investment decision” about whether to build an oil pipeline or a refinery.
As senior company official was last week quoted by the newspaper as saying “ Our program for appraisals is complete and the development mean we either pump crude oil or refine it, so there is currently not much work in the field.”
Despite the company’s overall spokesman George Casenove stating in an e-mail response that “Tullow is not planning to exit Uganda and has stated repeatedly that it is committed to Uganda for the longer term,” several well placed sources in the oil industry say the lack of movement on the issue is causing the company to internally consider its exit options, reported the influential Nairobi based weekly publication, the EASTAFRICAN.
‘This is informed by the protracted nature of the disagreement between the oil companies and the government of Uganda on whether crude of refined products are the best way to commercialise oil production in Uganda”, the paper adds.
“Unlike the two other oil companies in Uganda-France’s total and China’s CNOOC, both giants – Tullow does not have the financial resources to play out a prolonged waiting game. According to its interim management statement released on November 14, Tullow says together with its partners, it has presented ‘a joint development plan” to President Museveni. This plan was presented in July, almost four months ago. This plan emphasizes a crude-pipeline option while the Ugandan government prefers a medium sized refinery to begin with..
Consequently, no tangible agreement has been reached ‘We can’t agree on anything,” a senior official of Tullow Oil who requested for his anonymity said.
Other sources the Ugandan capital is a buzz with the word that the industry players have put together a rebuttal of the official document that the Uganda government is relying on in pursuing its refinery option.
Ends