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Tullow Oil strikes another oil find in Kerio Valley

BUSINESS
By Dominic Omondi | Mar 17th 2016 | 2 min read
By Dominic Omondi | March 17th 2016
BUSINESS

Kenya can boast of another oil find. This is after Britain’s exploration firm Tullow Oil yesterday announced that it had discovered more oil in Kerio Valley in Northern Kenya.

In a statement, the firm said that the Cheptuket-1 well in Block 12A, Northern Kenya, had “encountered good oil shows.” Cheptuket-1 is the first well to test the Kerio Valley Basin and was drilled by the PR Marriott Rig-46 to a final depth of 3,083 metres.

“The strong oil shows encountered in Cheptuket-1 indicate the presence of an active petroleum system with significant oil generation. Post-well analysis is in progress ahead of defining the future exploration programme in the basin,” read the statement in part.

Tullow’s Exploration Director Angus McCoss described the finding as “the most significant” find outside the Lokichar basin. Tullow operates Block 12A in South Lokichar Basin. For Tullow, the finding could mean opening up a second oil basin for development in the country south of finds already made.

“This is the most significant well result to date in Kenya outside the South Lokichar basin. Encountering strong oil shows across such a large interval is very encouraging indeed. I am delighted by this wildcat well result and the team are already working on our follow-up exploration plans for the Kerio Valley Basin,” said McCoss.

As previously advised, the PR Marriott Rig-46 will now be demobilised. On the back of the encouraging Cheptuket-1 and successful Etom-2 results, the firm said further exploration activities are being evaluated.

Low oil prices have prompted international oil firms to reduce spending on exploration and development. Last month, Tullow cut its capital expenditure amid write-offs (cancellation of bad debts) totalling at least $915 million (Sh93.3 billion) this year, as the company grappled with a slump in the global oil prices.

Tullow’s activities in the recent past have been subdued amid speculations that they might have either cut-back on their exploration activities or even downed their tools. Tullow discovered oil deposits in the neighboring states of Uganda and Kenya, but the two countries are yet to get into commercial production.

Tullow is working with partners Africa Oil and AP Moller-Maersk to develop finds in the South Lokichar Basin, where recoverable reserves have been put at an estimated 600 million barrels.

Kenya-Uganda pipeline

News of the fresh finds comes at a time when the Government said it will soon start transporting crude oil from Lokichar via Eldoret to the port city of Mombasa using trucks and rail.

While transporting the crude oil via pipeline would have been ideal, the Government contends that the cost is too prohibitive.

Moreover, Uganda which would have teamed with Kenya to construct the pipeline seems to have snubbed the Kenyan route for the Tanzanian one.

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