For many years Kenya has been exploring various energy sources. These efforts are proving fruitful going by the latest developments in the oil sector, especially after the country discovered oil in the north.This has given Kenya the impetus to set targets aimed at holding the first ever auction of petroleum exploration license to be held in 2017. The oil development success story places the country in a position to embark on rigorous plans to exploit natural energy sources among others.
For many years Kenya has been exploring various energy sources. These efforts are proving fruitful going by the latest developments in the oil sector, especially after the country discovered oil in the north.This has given Kenya the impetus to set targets aimed at holding the first ever auction of petroleum exploration license to be held in 2017. The oil development success story places the country in a position to embark on rigorous plans to exploit natural energy sources among others.
The realization that National Oil Corporation of Kenya (NOCK) has invited bids to gather comprehensive data on several shallow blocks in Lamu County is encouraging. Gathering of data will help attract exploration firms ahead of the anticipated auction of exploration rights.
According to Kenya’s Business Daily newspaper, NOCK Chief Executive Sumayya Hassan Athman said that the multi-client survey and studies are part of the preparations of an open licensing round. The NOCK CEO was quoted saying, “During the past exploration work on the Kenya’s offshore, seismic surveys have been dominated by 2-D data acquisition while 3-D data has been acquired in only a few blocks.
The intention of National Oil and the Ministry is to increase the amount of 3-D data coverage so as to better the image of drillable structures and accelerate exploration through drilling in the earliest phases of exploration.”
Ms Athman emphasizes that ready and comprehensive exploration data is considered attractive among investors because it owns the initial capital required. She observed that NOCK will take advantage of the current slump in exploration due to low global oil prices to expedite the 3-D surveys off Lamu Coast.
The CEO said the planned comprehensive 3-D surveys on the Lamu blocks would boost the country’s off-shore exploration that still lags behind Tanzania and Mozambique which have struck huge deposits of gas. “This strategy coincides with the recent world-class successes encountered offshore East Africa and the growing interest in the region. Kenya, which has not witnessed similar success in the offshore area, is keen to attract and accelerate exploration. Kenya will also ensure that the cost of investment in the country is comparatively low, fair and conducted on a competitive basis,” she further said.
The Permanent Secretary in the Ministry of Energy and Petroleum Mr Patrick Nyoike said the Ministry will publish in the Kenya Gazette the three new offshore and two offshore lands upon completion of separation areas given by two licensed companies to explore oil. The companies are, Anadarko and Tullow.
“There has been a low price environment where oil exploration companies’ expenditures have been significantly reduced. The market for the utilization survey vessels is in a slump. This slump creates an ideal opportunity to spend the next one-half years putting together a series of multi-client survey and studies to help de-risk the open acreage,” stated Mr Nyoike.
He confirmed that the Ministry of Energy and Petroleum has proposed a bill that will see investors compete for oil blocks and license given to the winning deal. The bill also proposes that oil blocks be allocated for bidding only.
Anadarko Petroleum Corporation gave up offshore areas L5 and L7 in Lamu basin while Tullow Oil submitted area 10BB and 13T in Northwestern Kenya. This separation of identified oil blocks exploration is being undertaken by the Survey Department.
The five new blocks will increase Kenya’s exploration areas to 51 from the current 46. The auction is expected to trigger a new completion among oil exploration majors interested in tapping into Kenya’s oil and gas business that has in the past year attracted huge interest among explorers.
With the Government’s one off fee of $1 million (Ksh105million) per exploration area, Kenya will receive at least Ksh425 million from sale of the five blocks.
Oil prices have been on a deep fall for the last three months recording one of the highest fall in the last five years described in the oil sector as, ‘the largest global surplus oil in modern times’.
The drop in oil prices has forced explorers globally to slow down operations due to uncertainty of future oil prices as a result of surplus production affecting the Organization of the Petroleum Exporting Countries (OPEC). Kenya and Uganda said in August they had reached a final decision on the route for a crude pipeline linking their newly found oilfields to the Kenyan coast. Uganda is among African Countries that discovered oil in the recent years whose drilling will be underway in two years time.
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