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Kenya: Chinese Prospect for Oil in Country
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East African Business Week (Kampala)
28 April 2008
Posted to the web 28 April 2008
Cedric Lumiti
Kenya's prospects of realising oil reserves have been re-awakened with the announcement by a Chinese company carrying out exploration in the Coast Province that it was moving to the second stage after a scoring at the first stage.
The National Off-shore Company Africa, which has been conducting exploration on blocks on the Kenyan coast and northern region, announced last week it would cast wide its exploration area to cover two more blocks.
Kenya contracted the Chinese firm two years ago to carry out geological surveys on a number of blocks with hopes of finding some deposits that would cut the country's over dependence on exports.
The agreement between Kenya and the firm was under a Production Sharing Contract (PSC) that will see the two share the spoils equally in case of any find.
Kenya spends approximately 23% of its foreign reserves on oil importation and the recent rise in prices has posed serious concerns over the future of the country's energy sector.
The National Oil Company (NOC) managing director, Mr. Mwendia Nyagah said the government was committed and would invest heavily into the geological activities especially after assurances by oil experts on the possibility of reserves especially in the Lamu area of Coast Province.
Nyagah who was making a tour of the exploration sites said oil deposits in the country would not be ruled out given that the archaeological characteristics of the areas under review matched others in the region where deposits had been discovered like those in Uganda.
"It is of concern to the government that the rising crude oil prices pose a serious threat to our energy sector. We have redirected our efforts and resources towards exploration and indications are positive," said Nyagah.
In addition, Nyagah urged other interested exploration companies to come on board and venture into other areas especially in the coastal, Northern and North Eastern provinces.
"We are calling on other interested investors in the exploration efforts to come on board. As a government, we understand that the more player we have, the more our chances of landing on something," he said.
He said NOC was in the process of modernising and automating its information system in efforts that would see companies that come late will concentrate on areas already established with the potential of oil reserves.
"This will ease the time and money put in exploration activities to further speed up our quest for oil in this country," he added.
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Kenya acquires most of her oil imports from Nigeria and Middle East countries.
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