Petroleum Africa
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Wednesday, April 4, 2018
Erin Energy Corporation is suspending its exploration activities in Kenya. The company holds stakes in four exploration blocks in the Lamu Basin off Kenya. The decision was made due to the company’s financial constraints.
The company has seen a drastic drop in cash flow since the beginning of the fall in oil prices. This situation, says Jean-Michel Malek, the acting CEO of the company, “causes a capital shortage that raises significant doubts about the ability of the company to continue exploration.”
Another factor that comes into play in the company’s difficulties in financing its exploration campaigns is the decline in its oil production volumes following the closure of the Oyo-8 well in September 2015 to May 2016, and the current closing of Oyo-7 in Nigeria.
In Kenya, exploration costs were $ 0.8 million in 2017, down from those of 2016 of about $2 million and 2015 of $7 million.
The exploration rights for L1 and L16 onshore blocks and the offshore blocks L27 and L28 were acquired in May 2012.
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