By John Oyuke
Pan-continental Oil & Gas NL said the drilling ship â Deepsea Metro 1 â would be used to sink a well on the Mbawa prospect within block L8 off Lamu archipelago.
âWe are glad that a drilling rig contract has been signed by our operator Apache for the L8 Mbawa Prospect,â Barry Rushworth, Pancontinentalâs Chief Executive said in statement.
âWe are pursuing what we see as a major oil play in the country.â
Kenya has seen interest in its exploration blocks rise since its first oil discovery in the dry and dusty county of Turkana, where Africa-focused UK firm Tullow Oil has been exploring.
East Africa has become a focus of interest for oil and gas exploration, but a worldwide shortage of rigs threatens to slow growth and increase the cost of operations.
Apache hopes to commence operations in the third quarter of 2012, with the actual date depending on when the drilling rig is finished with its current operations.
The well is expected to take some 45 to 60 days to complete to a planned depth of 3,250m sub-sea in water depth of 860m, easily within the range of modern equipment.
Pancontinental has a 15 per cent interest âfree-carriedâ through Mbawa drilling by Tullow Oil up to a âcapâ of $9 million.
The economics of oil developments are better than those for gas, with potential for much earlier cash flow and lower development costs.
Pancontinental has four projects offshore Kenya covering more than 18,000 square kilometres in licence areas L6, L8, L10A and L10B, with the L8 Mbawa project being the most advanced and Mbawa being the first prospect to be drilled.