Africa Oil, which has a 50 percent stake in Kenyan fields where commercial reserves of crude have been found, wants to offer part of its holding by early 2016 to a new partner that can help it fund development.Africa Oil and its existing partner Tullow Oil, which holds the other 50 percent, have found more than 600 million barrels of recoverable reserves. A final decision to develop the fields is expected in the first quarter of 2016.
The discovery is part of a string of oil and gas finds stretching from Uganda and along Africa’s east coast that have made the region one of the world’s hottest untapped hydrocarbon provinces.
“Before project sanction in 2016, we probably would like to have a partner,” states Keith Hill Africa Oil CEO, although he said the plan was “not carved in stone” and the company could finance development itself if needed.
Asked what stake Africa Oil would keep, Hill said at the firm’s Nairobi offices: “That’ll be the biddable item. We’d love to stay in at about 25 percent.”
‘I think the window is going to be between 20 and 30 percent,’ he said of the amount the firm was likely to be able to retain. ‘A lot depends on how our drilling campaign goes on.’
Tullow, the operator of the Kenyan concessions, and Africa Oil plan to drill up to eight wells to open up new basins in 2015 in the search for extra reserves.
Hill said Kenya’s plans announced in September to impose a capital gains tax on energy firms, possibly as high as 37.5 percent on foreigners, could deter new investors in Kenya. But he said he did not believe the tax would impact a “farm down” deal as there would be no recorded capital gain.