Top oil explorers could sell stakes in Kenya’s oil finds

Last Updated 12 years ago by Kenya Engineer

Leading oil explores, Africa Oil and Tullow have announced that they may sell as much as half of their fields in Kenya to a strategic partner to share costs.

Africa Oil Chief Executive Officer, Keith Hill pointed that each company holds a 50 percent stake in the South Lokichar Basin fields and may sell 40 percent to 50 percent of the combined assets to “a multinational” company.

According to a report by Bloomberg, Hill notes that Interest in buying a stake may rise because the oil resource estimate could easily triple by the end of next year, using any reasonable risk on the wells we’re drilling.

Africa Oil on Tuesday increased more than six fold its estimate for gross contingent resources to 368 million barrels of oil. The partners are ready to start pumping crude as soon as next year after discovering first oil last year.

“We’re talking probably 18 months to two years from now, until we’ve drilled enough wells to feel confident enough about what we have,” that “we can attract a partner on terms that we’d find acceptable,” Hill said.
Africa has been in talks with some interested companies, Hill said, declining to name any. A possible partner would have to offer “a big premium” to compensate for reserves that have yet to be found, he said.

Kenya may become East Africa’s first oil-exporting nation as soon as 2016 after the companies increase oil production, Tullow Chief Operating Officer Paul McDade said in July.

Extracts from Bloomberg