Continental Focus, International Reach

Kenya Deemed Commercial with Deeper Strike

Thursday, August 1, 2013

Kenya, with another success under its belt with the drilling of the Etuko-1 well, has been deemed commercial. Africa Oil, partnered with Tullow Oil, said that the well was deepened to penetrate Miocene-age sandstones of the Lower Lokhone formation and has encountered approximately 50 meters of potential net pay. This is in addition to the over 40 meters of net pay confirmed in the shallower Auwerwer and Upper Lokhone reservoirs previously announced.

Although the Lower Lokhone sands are lower quality than the main objectives in the Auwerwer and Upper Lokhone formations, the partners successfully flowed oil from this interval in the Ngamia-1 well. Once operations at Etuko-1 are complete, the rig will move to the Agete prospect located 6 km north of the Twiga South discovery.

These reserves, in addition to those discovered throughout the drilling program, exceed the volume threshold needed to be deemed commercial. Africa Oil says that development studies will commence in Kenya.

A 550-sq km 3D survey over the area, which will support an appraisal program, is also scheduled to commence in the Q3 2013.

The company said that its results to date onshore Kenya are an important step towards understanding the overall Basin potential and its commerciality. Resources discovered to date are of a scale that the partnership will initiate discussions with the government and other relevant stakeholders to consider development options. These discussions include consideration of a “start-up phase” oil production system with potential to deliver significant production rates with oil exported via road or rail in advance of a full-scale pipeline development. To facilitate these development activities in parallel with exploration and appraisal, an Area of Interest (AOI), encompassing the basin discoveries and further prospects in Blocks 13T and 10BB, was agreed with the government in February 2013. This agreement allows a multiple field approach to development of the resources while permitting the continued focus on exploration to increase the resource base while concurrently appraising discoveries.

The news out of Kenya also effects neighboring Uganda, where Tullow, CNOOC, and Total are working to develop some 1.5 billion in reserves and get them to market. According to Tullow in its H1 results report, with production from Kenya combined with output from neighbor Uganda, a pipeline could deliver 500,000 bpd by 2018.


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