31 May 2007 - 12:31
  • News Code: 106019

Three Australian firms will next year drill three offshore exploratory oil wells in Kenya.

Energy director, Don Riaroh, said the three firms, Woodside Energy, Gippsland Petroleum and Origin Energy, will sink the wells in different oil exploration blocks along the coast in accordance to the agreements signed with the government.

Contracts signed by the government and the three Australian firms require wells be sunk within an agreed time frame when the Indian Ocean’s current’s are not strong as the exercise is expensive.

Speaking during the just concluded African oil and gas, trade and finance conference in Nairobi, Riaroh said Kenya had steeped up the search for commercial viable quantities of crude oil (hydrocarbons).

Kenya currently has very few open blocks remaining for exploration. The government has stepped up promotion of the country for oil exploration by offering good incentives and low cost entry requirements to investors.

The National Oil Corporation of Kenya (NOCK) and Somken Upstream, which has teamed up with East Africa Exploration (EAX) are among the companies that have applied for award of licenses. Up to 80 percent of Kenya’s exploration blocks have been leased, and an inter-ministerial committee is set to meet soon to deliberate on awarding of licenses for the remaining acreage to investors.

Despite 31 wells having been sunk dating from Kenya’s pre-independence period, luck is yet to strike.

Woodside Energy said Kenya has the best prospects in East Africa. General manager Peter Grant, said information from Pomboo well in block L5 off the coast of Lamu are still being studied.

“The well was plugged in January this year upon reaching a depth of 4,887 meters. Whilst the presence of significant reservoir sands was encouraging, hydrocarbons (which indicate presence of oil) were not encountered,“ he said.

On May 28, oil fell over a dollar after Nigerian oil unions at the weekend suspended a two-day strike that had threatened to halt oil shipments from the world’s eighth-largest oil exporter.

London Brent crude fell $1.05 to $69.64 a barrel. US crude fell 69 cents to $64.51 a barrel, after surging more than $1.00 on Friday. The market was thin due to holidays in the UK and the United States.

On Saturday, workers at the national oil company had suspended the two-day strike after the government agreed to a pay rise and other benefits, although oil traders remained anxious over exports. Output from Nigeria is already down by about a quarter after 18 months of militant attacks against oil installations.



News Code 106019

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