Petroleum Africa
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Monday, February 16, 2015
Kenya’s state-run oil and gas firm, National Oil Corp. Kenya (NOCK) is looking to raise funds to buy stocks in oil blocks in the country’s Turkana region. The company is looking to raise an estimated $2 billion from capital markets and use internal funds for the buy. NOCK is eyeing oil-rich blocks 10BB and 13T in the South Lokichar Basin, where Tullow Oil and Africa Oil have discovered an estimated 600 million barrels so far.
Chief executive of the state-run firm, Sumayya Athmani, said the government will be exercising the “back-in option” in the contracts it signed with the operator of the blocks. Through the back-in-option the state is allowed to acquire an equity position when commercial production starts.
“The government will continue to get the share of the oil [sales income], but in addition, there is a further right to back-in as an equity partner, which will entitle us to additional quantities once it [production] starts,” Athmani said in an article in the Star. “You only do that once the commercial viability has been confirmed by paying your way in and that is why we are raising this money.”
A transaction team is already arranging the huge fundraising, she said, ruling out budgetary funding from the government. “It’s a significant amount. If you are trying to raise it to finance an exploration campaign, that can be more challenging,” she said. “But when you have a commercial discovery, you are raising money like that to produce oil and much larger amounts have been raised [elsewhere]. We see that is something we should raise and we are quite confident.”
The South Lokichar Basin, one of the 12 oil and gas basins countrywide, is the only one gearing up for the development stage, with most of the others generally still in the exploration phase.
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