Kenya: Government Signs Oil Search Deal With Swedish Firm for Turkana Area
The Nation (Nairobi)
6 October 2007 Posted to the web 5 October 2007
Nairobi
The Government has signed an oil exploration contract with Lundin Petroleum of Sweden to be conducted in Anza Basin, west of Lake Turkana.
The resource-sharing agreement will see the company spend four years exploring the basin, which forms block 10A.
Speaking during the signing of the contract at his office at Nyayo House, Nairobi Energy minister Kiraitu Murungi said the Government had intensified oil exploration exercises in the country in the recent years.
Striking minerals
"Its our belief that with discovery of oil and gas in the neighbouring countries, Kenya has a high likelihood of striking the two minerals," said Mr Kiraitu on Thursday.
He, however, said the country remained largely unexplored adding that since April, many oil exploration companies had shown interest in taking up the various blocks for prospects in the lucrative fuel sector.
"Lundin is a reputable firm and is doing a good job in the neighbouring countries and I think it's a matter of time before we strike gas or oil," Mr Kiraitu said.
Lundin Petroleum president and chief executive officer, Charles Ashley, said the exploration carried out in 1980s in Anza Basin had yielded some hydrocarbons, an indicator of possible oil or gas deposits. There are nine other blocks that remain unexplored in the area.
He said the block covers 14,747 square kilometres and it costs about $15 million (Sh1 billion) for the studies and another $10 million (Sh670 million) for the exploration of a well.
"If successful, we shall share the oil proceeds. This is a standard contract." Mr Ashley said. Lundin Petroleum, he said, had operations in Somalia before the country fell into civil strife.
This forced it to wind up its operations in the country. The firm also has interest in southern Sudan and Attempts by Woodside Energy Limited, an Australian firm at offshore oil exploration in Lamu early in the year, hit a snag after the well yielded nothing.
According to Mr Ashley, the firm produces 40,000 barrels of oil a day in the countries where it has set up operations. They include France, Indonesia, Britain, Norway and Netherlands.
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