Africa Oil and its partners in Kenya will drill up to eight exploration and appraisal wells starting from December to boost proven resources and improve financing prospects for field development and an export pipeline, an executive said.
The group, which includes Tullow Oil and Maersk , initially planned to build a single pipeline to connect Ugandan oil fields and the Kenyan project to Kenya’s coast, but Uganda opted to build its own pipeline via Tanzania.
Africa Oil CEO Keith Hill told Reuters building a standalone pipeline for Kenya “makes us much more dependent on our own resources for justifying and financing that pipeline”, encouraging further drilling to firm up oil discoveries.
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The South Lokichar Basin in north Kenya is now estimated to have 766 million barrels of recoverable contingent oil resources.
These are classed as 2C resources, covering proven and probable resources, while 1C covers proven resources. “If we could get to a billion barrels of 2C and say 300-350 million of 1C those would give us a pipeline tariff and lending base which would work very well for us,” he said.
The latest drilling programme will begin with two exploration wells, the first to be spudded in early December, followed by two appraisal wells to make further assessments of existing finds.
-REUTERS
