australian firm inks sh2.5b deal to prospect

Australian firm inks Sh2.5b deal to prospect for gas Updated Wednesday, February 5th 2014 at 21:33 GMT +3 By MACHARIA KAMAU An Australian firm, Pancontinental Oil and Gas has signed a Sh2.5 billion ($30 million) farm-in agreement with a Dubai based firm. The pact is expected to enable it carry out comprehensive survey and drill exploratory wells on a block it has been prospecting for oil in coastal Kenya. The firm yesterday announced that it had completed the first farm-in deal on onshore segment of its Kenya exploration permit, Block L6, located in the Lamu Basin with Dubai based Milio E&P and Milio International. The block has onshore and offshore portions. At the same time, Pancontinental and Far Ltd (its joint venture partner in the block) said they planned to fast track the development of the block, should exploratory drilling find viable natural gas deposits. This is hoped to position them to tap into the planned natural gas electricity generation plant planned for Lamu. Kenya plans to put up an 800-megawatt natural gas fired electricity plant in Lamu. Surveys of the block indicate there is potential for as much as 3.7 billion barrels of oil and gas. Pancontinental holds a 40 per cent stake while Far Ltd, also Australian, has a 60 per cent per cent interest. With the entry of Milio, the ownership structure will change with Milio owning 60 per cent, Pancontinental 16 per cent interest and Far Ltd the remaining 24 per cent. Milio will also operate the block going forward. It will embark on a 2D seismic survey in April and start drilling an exploratory well in the first half of next year. The company will however not participate in the offshore portion of the Block L6. Far Ltd has been the operator of the block. “The current joint venture (Pancontinental & Far Ltd) will be fully funded through the acquisition, processing and interpretation of the regional 1,000 km stretch of 2D seismic survey to confirm at least three prospects as drilling targets,” The deal is subject to State approval.
Read more at: http://www.standardmedia.co.ke/business/article/2000104031/australian-firm-inks-sh2-5b-deal-to-prospect-for-gas