Tullow likely to seek partner for country's oil fields
28 July 2014, 21:46
Nairobi - Canadian explorer Africa Oil Corp. and
its partner Tullow Oil are likely to bring in a third partner to help develop
their oil discoveries in northern Kenya, Africa Oil's chief executive officer
The firms discovered oil reserves in Block 13 T and Block 10
BB in northern Kenya's South Lokichar Basin, estimated at a combined 600
Experts say those reserves are enough to make a pipeline
viable even without factoring in crude deposits of 3.5 billion barrels, found
in neighbouring Uganda.
"We will likely bring on a partner to help develop
Lokichar Basin reserves but no timetable has been set," Keith Hill said in
an email response over the weekend to questions from Reuters.
Oil discoveries in Uganda and Kenya and gas deposits found
off Tanzania and Mozambique have turned east Africa into a hot spot for
Kenya, Uganda and Rwanda have invited bids for a single
consultant to oversee a feasibility study and initial design for the
construction of a 1,300-kilometre (808-mile) pipeline to transport crude to the
In April, executives of both Tullow and Africa Oil said they
aimed to submit development plans to the Kenyan government in late 2015 for
Africa Oil also holds licences for exploration blocks in
Ethiopia and in Puntland, a semi-autonomous enclave in Somalia.
Hill said Africa Oil plans to spend some $1.6 billion this
year and next in exploration activity on its blocks in the three countries.
"Our gross budget this year is over $800 million and we would expect a similar amount next year but (that) budget has not yet
been approved," he said.
Africa Oil and its partner Marathon Oil Kenya Limited B.V.,
a unit of U.S.-based Marathon Oil Corporation have also discovered gas in Block
9 in northern Kenya.
Hill said while the amounts had not been proven, they
estimated the gas discovered at the block's Sala-1 well at between 0.5 trillion
and 1 trillion cubic feet, although tests were still being carried out.
"(We) will spud Sala-2 appraisal well before end of
July to help confirm," he said.
When announcing the discovery in late June, Africa Oil said
it had held discussions with the government and power companies to see how to
fast-track a gas-to-power project at the site.
"We have held several meetings with GofK (Government of
Kenya) to progress gas-to-power project terms and believe these will be sorted
out in next 60 days," Hill said.