Oil exploration in Northern Kenya has received a major shot in the arm after the International Finance Corporation invested 5 billion Kenya shillings in Africa Oil, one of the cardinals operating in the region. Africa Oil, which partners with Tullow Oil indicated that IFC made the 5 billion Kenya Shilling investment in a private placement that will see the lender secure a 6.83 per cent stake in the explorer. The new funds will go towards exploration in Lokichar where its partner Tullow Oil has in the past struck a series of promising wells.
The funds will mostly go towards exploration work on blocks 10BB and 13T located in the South Lokichar Basin estimated to hold as much as 680 million barrels of oil. The IFC investment is meant to speed up development of the oil industry.Africa Oil Chief executive, Keith Hill said, “This investment will underscore our commitment to conducting our operations to high social and environmental standards. The investment allows us to continue moving the Lokichar project forward in the difficult times of low oil prices and we hope that IFC will become a long-term partner as we move the project into development.”
Keith Hill further highlighted that the firm is looking forward to expand the relationship with the World Bank’s private sector lending arm as development accelerates with regard to the recently announced export pipeline agreed by the Kenya and Uganda host governments.The oil sector is seen as a potential stimulus for the rapid growth of the economy. The IFC global head of natural resources Lanc Crist said that IFC looks forward to an active engagement with Africa oil that will help spearhead Kenya’s entry into the ranks of oil producing nations in Sub- Saharan Africa. The current pricing of oil in the international market is currently at 4,800 Kenya Shillings per barrel which is a six-year low.The IFC funding comes after Helio Investments got a 12.4 per cent stake in the firm in May after investing 10 billion Kenya Shillings in Africa Oil.