12 October 2017

Kenya Awards Firms Licence to Drill for Natural Gas

Zarara Oil & Gas Ltd will start drilling two wells of natural gas after Kenya's National Environment Management Authority (Nema) approved environmental licences for well sinking on Pate Island off the coast in Lamu.

This is in line with the government's plan to expedite commercial gas production for power generation.

The company has been set strict deadlines by the Ministry of Energy to start drilling Pate 2 by the end of the year and later Pate 3 as the government wants to reduce the country's dependence on expensive hydro and thermal power.

Tanzania -- which has discovered 57.6 trillion cubic feet (TCF) of gas both onshore and offshore -- is the only country in East Africa using natural gas to generate power and plans to use the commodity for fertiliser production.

Zarara's licences will run until July 2019. It is a subsidiary of Midway Resources International. Nema's director-general Geoffrey Wahungu said Zarara is required to undertake exploratory drilling at an estimated cost of $159 million.

Logistics

Sinking of Pate 2 well is expected to take 120 days to drill. Zarara said it has started mobilising Greatwall Drilling Company Ltd's drilling rig, which is already in the country. North Sea Well Engineering Ltd of Norway is the design and planning company.

Kenya Oil and Gas Working Group (KOGWG) and World Wildlife Fund (WWF) have rolled out a programme to manage the expectations of the local community in Lamu to avoid the Pate project being abandoned by the investor.

KOGWG's Network Co-ordinator Muturi Kamau said communities from Lamu and Pate Island are being informed about the benefits of Zarara's exploration activities especially in generating electricity from the gas.

"The community is being trained on mitigating perceived risks and engaging in alternative dispute resolution mechanism to avoid confrontations as excess demands can scare away an investor," said Mr Kamau.

Pate Marine Community Conservancy (PMCC) said they fear the livelihoods of farmers growing mangoes, maize, vegetables and coconuts could be affected by the drilling of natural gas wells.

"We are worried about what will happen to farmers whose land is next to the drilling site of the wells. A commercial discovery could affect the lifestyle of the people," said PMCC chairman Mohammed Hussein.

Kenya

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