Oil, gas discovered in Lamu


Another oil and gas discovery has been announced in Lamu , the second find this year, following successful finds earlier in January at Lokichar, near Lake Turkana.

The oil and gas find was made by British Gas , a UK independent oil and gas exploration firm , according to Energy Cabinet Secretary Davies Chirchir who was addressing a forum of energy sector stakeholders in Nairobi.

The forum sought industry comments to a new policy and laws for the sector in view of recent industry developments including confirmed commercial discoveries of 600 million barrels of oil.

British wildcat Tullow Oil in January announced twin discoveries at Amosing 1 and Ewoi 1 wells, in a campaign that marked 100% success rate in a campaign spanning three years.

He however, said while the find was not commercial, it was located in a highly prospective area.

“British Gas Group has found oil and natural gas . This is a very prospective discovery although it is not commercial,” said Mr Chirchir.

“The area is next to Mbawa 1 and block L4 ( licensed to Zarara), all in Lamu County with a high potential for gas,” he added . A consortium led by US firm Apache Corporation announced Kenya’s first ever find in September 2010.

BG Group has a 45 per cent interest and is the block’s operator, with other partners including Thailand’s PTTEP (15 per cent) and Pancontinental Oil & Gas (15 per cent).
Premier Oil said it had last year withdrawn its 20 per cent stake from the block..

Ten wells are planned to be drilled in different basins this year as Kenya is now regarded as a promising frontier following discoveries made by Tullow Oil.

The East African Rift Basin system is one of the last of the great rift basins to be explored.

Kenya does not have a (revenue sharing) model for gas with licensed gas prospectors being given them oil terms.

But energy policy makers are currently developing terms for the exploitation of natural gas after exploration firms rejected a “conversion factor” that would have modified their current oil revenue sharing terms to a contract for natural gas mining.

Exploration companies have been pushing for a revision of the terms to give them a bigger share of income generated from the operations. They are demanding a bigger share of revenues based on the argument that tapping gas reserves costs more than developing oil wells.

The prospectors which had been licensed to explore only for oil reserves, and the operators say they needed to sign separate revenue sharing contracts .


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