From: Leo Odera Omolo
Date: Tue. 20 Oct. 2009

Business News By Leo Odera Omolo In Kisumu City

ALL the indications are that Kenya is likely to strike it rich and join the league of rich oil producers on the African continent, within the next three weeks.

Breaking the good news at the weekend, the country’s ever laughing Energy Minister, Kiraitu Murungi, said he was hobbling with optimism, when he gave an exclusive interview to the EASTAFRICAN weekly.

“It is only a matter of days, we would be celebrating, God willing, I shall be announcing of historical discovery of oil at the end of the month”, the Minister said.

“Christmas will indeed come early, should the drilling of a five kilometer deep well in Isiolo district, in the Northern Kenya, by a Chinese firm, set to begin next week on October 28, strike oil”,Mr Murungi said.

This time around, unlike in the past attempt that ended in disappointments, after sinking millions of dollars into empty wells, the Minister insisted, “We have done our home work well and all indications are that Kenya will join Uganda in celebrating the start of a new oil producer.\,” Mr. Murungi added.

“We can’t tell the exact size of the oil deposits we have yet, and there is a remote possibility that they may not be sufficient quality for commercial drilling, but that too will be known at the end of the month,” the Minister said.

Murungi said he was convinced the seismic trials undertaken over the past two years are not lying.

Kenya’s optimism is informed by the geographical location of the prospective deposits, not too far from oil-rich Southern Sudan, while deposits, according to the Ministry of Energy, extend into the neighboring Uganda’s newly discovered deposits, which are found even under Lake Victoria

The China National Offshore Oil Corporation will start drilling for oil at Block 9 Bogal 11,near Isiolo town in Northern Kenya next week. The company has spent up to USD 20 million in prospecting at the Bogal11 well alone.

The Chinese company is expected to spend about USD 15 million to gather data and analyze it..”The Anza basin well will be deepest well ever drilled in Kenya,” said the Energy Minister.

This particular firm is also licensed to explore oil deposits in the Lamu Basin at the Coast Province.

To cement Kenya’s new status, the country is moving to join hands with international organization to put in place product management system for its envisaged oil wealth.

It is among the first supporters of the formation of the South-South Energy Fund, that was proposed in a meeting held in Nairobi last week. The funds mandate will be for the purpose of training high-level energy experts, such as reservoir engineers, petroleum economists, geoscientists and petroleum lawyers.

It will be managed by a secretariat, at the United Nations Development Fund, based at the country capital. The personnel to be trained will be placed in selected universities around the world..

“{We} resolved to set up South-South Energy Fund with a secretariat based at the United Nations headquarters in Nairobi, Mr Murungi said, adding that “Kenya is vying for the position of secretary general of the proposed fund” .

Kenya and Liberia have each agreed to contribute USD 100,000 as seed capital to fund the secretariat’s establishment. The UNDP has pledged USD 1 million.

While addressing the Second South-South high level meeting on Oil and Gas Management at the United Nations headquarters in Nairobi last Thursday, Mr Murungi said that ” We in Kenya would like to manage our oil and gas resources in a manner that promises maximum benefits to our people, and to modernize our physical and social infrastructure.

The Kenyan Minister invited the petroleum exploration companies to apply for the remaining 14 blocks. “We believe there is plenty of oil and gas in Kenya and we are confident that we shall make commercial discoveries.”

The Minister said with the discoveries in Sudan, Uganda and Tanzania, we believe that Kenya is now on the threshold, too. It is only a matter of time.”.

Africa’s economic salvation lies in its vast oil and gas reserves. As is evident in the Middle East, where oil and gas have transformed barren desert economies, well managed oil and gas resources can be principal agents of socio-economic transformation in Africa. Accelerated development of Africa’s upstream industry is our quickest route out poverty Mr.Murungi said..

Out of 30 investigative wells drilled in Kenya, 19 have shown traces of hydrocarbons. though none are in commercial production. The country has signed 17 production-sharing agreements over the past 18 months, and there are 14 blocks available for oil and gas exploration.

In another planned investment in the industry, Origin Energy Ltd ,an Australian company, aims to start gathering data for an exploration study in the Indian Ocean, near Malindi.

The Minister, however, struck a note of caution as well ,saying “here are those who see oil as evil. Oil extraction in Africa has been associated with dictatorship, tyranny, Imperialism exploitation, neglect of agriculture, corruption and abuse of human rights , hence the question, is oil a blessing or a curse in Africa?”

Ends

leooderaomolo@yahoo.com

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subject: IS KENYA JOINING THE LEAGUES OF THE OIL RICH AFRICAN NATIONS WITHIN A FEW WEEKS FROM NOW?