27 April 2014

Kenya: Exploration Activity Up As Kenya Dashes for Oil, Gas

At least five upstream oil and gas companies are ramping up activity in Kenya, as the country becomes a focal exploration point in a dash for the commodities. Camac Energy, Simba Energy, Swala Energy, FAR Ltd and ERHC released operational updates on Tuesday and Wednesday for onshore and offshore blocks countrywide in which they have interests.

Kenya has four principal exploration basins - Lamu, Anza, Mandera and Tertiary Rift - where the oil and gas blocks are located. Increased exploration comes on the back of discoveries of hydrocarbon deposits in the country.

Africa Oil and Tullow Oil Plc have recently made significant discoveries in South Lokichar Basin, while in Mandera basin, the Tarbaj-1 well and nearby oil seeps in the south of Block 1 have already confirmed presence of hydrocarbons.

Camac, which has interest on Blocks L1B and L16 onshore and L27 and L28 offshore in the Lamu Basin, said it has submitted tender requests for the blocks to drilling companies active in the region and expects final bids early May.

"Work is focused on drilling two exploration wells in 2015/2016: one in Block L1B, and one in Block L16. Current activities onshore Block L1B are targeting net unrisked prospective resources of 900 MMBO (million barrels of oil) from five leads," it said on Tuesday.

For its offshore blocks, "evaluations are being directed towards drilling one exploration well in either Block L27 or Block L28 in 2016/2017."

Australian explorer, FAR Ltd, which has a 24 per cent interest in the onshore part of Block L6 in Lamu Basin and 60 per cent interest in the offshore part of the same block, said it is currently progressing a farm-out initiative for drilling an offshore well.

"The recent Sunbird-1 discovery well drilled by the BG Group in the nearby Kenya Block 10A targeted a Miocene reef structure. The Miocene reef play extends along the coast of Kenya and through both of FAR's offshore blocks, L6 and L9," it said.

It expects that success on the Sunbird-1 well "will change the exploration landscape offshore Kenya".

Swala Energy, another Australian explorer which is in a joint venture with Tullow, Wednesday announced that a 2D seismic acquisition programme on Block 12B in Nyanza Basin has commenced.

It said the basin is an off-shoot of the East African Rift System where large quantities of oil have been proven in recent years by Tullow in Uganda and Kenya.

Reprocessing low quality seismic data recorded in 1989, it said, has revealed a possible Tertiary basin fill of over 3,000m, supported by Passive Seismic work the joint venture carried out last year.

"Our technical re-evaluation of the legacy seismic data is encouraging and we look forward to seeing the results of the seismic survey that has now commenced," Swala's CEO David Mestres Ridge said in a statement.

Vancouver-based Simba Energy, which has 100 per cent interest in Block 2A in Mandera Basin, on Tuesday announced it has signed an agreement with Bell Geospace to conduct a comprehensive airborne Full-Tensor Gradiometry survey on the block. The survey is to start early May and be completed within 30 days.

"It is expected that the resulting data from this FTG survey will serve to provide for a more focused and cost effective 2D seismic well location targeting programme planned for later this year," it said.

Africa Oil has already spud an exploration well at the Sala prospect in Block 9 to the northwest of Block 2A.

American company ERHC Energy on Tuesday announced the start of a 2D seismic programme covering at least 1,000 line kilometres on Block 11A in Lokichar Basin, which is being carried out by BGP Kenya.

Block 11A is located northwest of Lokichar Basin where the significant Ngamia-1, Twiga South-1, Ekales-1, Agete-1 and Etuka-1 oil discoveries were made.

ERHC holds a 35 per cent interest in the block after farming out a 55 per cent stake to CEPSA, which is now the operator.

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