Nairobi — Sweden's Lundin Petroleum will acquire a 30 per cent holding in oil exploration of Block 9 in northern Kenya from the China National Offshore Oil Corporation (CNOOC).

However, the acquisition, through Lundin Kenya BV, is subject to approval by Kenya's Ministry of Energy.

CNOOC Africa operates Block 9, which is adjacent to Block 10a, operated by Lundin Petroleum in the Anza Basin of northern Kenya. Block 9 covers 27,778 square kilometres and has had only three exploratory wells drilled in it, in the late 1980s.

CNOOC has bagged four of Kenya's 11 exploration blocks, including offshore blocks covering more than 100,000 square kilometres in the Indian Ocean.

The company's operational plans for 2008 include finalising the acquisition of seismic data and preparation for well drilling in 2009.

According to Ashley Heppenstall, president and CEO of Lundin Petroleum, his company's entry into Block 9 with CNOOC Africa, further establishes Lundin Petroleum's strong position across the prospective Anza Basin in Kenya.

Lundin Petroleum's technical team identified both Blocks 10a and 9 as primary areas to secure.

Last year, the company signed an agreement with the Kenya government to explore Block 10a.

Lundin Kenya BV is the sole operator under the Block 10a, with the Kenyan government having an option to participate with up to a 13 per cent interest following commercial discovery.

Past exploration efforts that date back to the late 1980s have proven the existence of excellent quality, oil-prone source rocks, oil-saturated sandstone reservoirs and several structural traps that remain undrilled.

No hydrocarbons have been found to date in Kenya, where prospectors have drilled about 40 wells.

But Energy Ministry officials say there are large, promising areas both onshore and offshore that have yet to be investigated.

Far fewer wells have been drilled in East Africa than around the rest of the continent. But many firms believe the region may have potential, saying poor quality data collected in the 1960s and 1970s painted the region as probably having some natural gas but little oil.

Lundin Petroleum intends to spend about $15 million to generate its own seismic data on the Anza block in the next one year. Should the data reveal any oil deposits, the company will sink a well at a cost of $10 million in the next three years.

Kenya has set aside 11 blocks for oil exploration activities, some at the coast and others in the north.

In April 2006, the government gave the Chinese state-owned CNOOC exclusive rights over a total of six out of 11 available blocks, including Blocks 9 and 10a in the Mandera area.

Block 10A covers an area of 14,748 square kilometres and is located in the onshore Anza Basin, an extension of the Muglad Basin of Sudan.

Two international oil and gas exploration firms say they have acquired new data that reveal a reserve potential of 1.1 billion barrels of oil in Lamu.

Australia-based Gippsland Offshore Petroleum and its partner Pancontinental Oil & Gas say they have completed geophysical survey of a 6,300-kilometre line of Lamu basin by air and gathered enough data to be processed in Melbourne.

The data will be integrated into the recently acquired seismic data with the mapping or study of the drillable sites set to commence in August next year.

On the Kenya-Sudan border, UK oil company Camec International is negotiating for exploration of Block 11 in Loktikipi Basin.

Spanish oil giant Cepsa had expressed interest in the Anza Basin Block 10a two years ago, but it was awarded to CNOOC.

Lundin Petroleum is an independent Swedish oil and gas exploration and production company with a well balanced portfolio of world-class assets in Europe, Africa, Russia and the Far East.

The company is listed on the Nordic stock exchange, LUPE.