BG to submit plans after Lamu oil find

June 21:


An oil company’s offshore platform. Australia’s Pancontinental Oil and Gas has said it has discovered reserves about 100 kilometres off the Mombasa coastline. Photo/FILE 

BG Group together with its venture partners announced last week Wednesday that it had made the first discovery of oil off the Lamu coast in Kenya.

The London Stock Exchange-quoted firm, working with PTT Exploration and Public Company Ltd (PTTEP) and Pancontinental Oil and Gas NL found oil and natural gas in the Sunbird-1 well that was drilled by the Deepsea Metro 1 rig in offshore exploration area L10 A.

The oil column is believed to be 14 metres thick beneath a gas column of 29.6 metres. Well drilling was completed in March this year after starting in January. The cost of drilling an offshore well in Kenya is about $80 million.

“The Sunbird-1 oil is the first-ever discovery offshore Kenya. It is the only offshore oil column ever reported seaward of the eastern coastal margin of Africa, from South Africa to northwest tip of Somalia,” said Pancontinental’s chief executive officer Barry Rushworth.

He said calculating the Sunbird results has been a lengthy process due to the complexity of the data derived from the well and the data obtained shows the block L10A consortium will find commercial oil.

BG owns 50 per cent of acreage L10A, Pancontinental 18.75 per cent and PTTEP 31.25 per cent. Premier Oil Plc last year decided not to participate in drilling Sunbird and its 20 per cent equity was taken up by other partners.

Prior to Premier’s withdrawal, BG owned 40 per cent of acreage L10A while PTTEP of Thailand had 25 per cent and Australia Stock Exchange-listed Pancontinental held 15 per cent.

Tullow Oil Plc and Africa Oil Corporation have discovered 600,000 million barrels of oil in the South Lokichar Basin in northwestern Kenya and production will start in 2018 if the government approves field development plans.

The plans for laying pipelines and other production facilities will be submitted by Tullow and Africa Oil to the government for approval in the final quarter of 2015.

Mr Rushworth said Sunbird results are the first proof of the presence of oil offshore Kenya and BG as the operator of block L10A continues to analyse the well data and will recommend an exploration programme for the future.

“We believe that this is a play-opening discovery in Kenya’s Lamu basin. Because of the Sunbird discovery, we expect to see a significant increase in industry interest offshore Kenya,” said Mr Rushworth.

Evaluate Energy Ltd, a consultancy firm based in London, expects Kenya’s recent oil discoveries to hold ample opportunities for both juniors and established oil companies alike in the coming 12 months.

“Kenya’s recent successes have been oil discoveries rather than gas; this will whet the appetite of the world’s largest companies and should result in some prominent bidders when the auction begins,” said Evaluate Energy.

There are currently five licensing rounds for exploration areas due to close during 2014 on the continent including Tanzania, Libya, Angola, Republic of Congo and Kenya, with the latter possibly the most exciting of them all.

Hartleys Ltd, a brokerage company, expects any success made by Sunbird well in area L10 A will have direct positive implication for exploration block L6 and L9 as the three acreages are in the same locality.

Hartleys said in a research note issued to investors that several targets similar to the one tested by the Sunbird well exist along the Kenya Coast including offshore area L6 and L9 owned by FAR Ltd of Australia.

Source: http://www.theeastafrican.co.ke/business/BG-Group-to-submit-plans-after-Lamu-oil-find-/-/2560/2357038/-/vjjjavz/-/index.html?