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Kenya, Japan state firms join to survey for oil

By Reuters | May 9th 2012

The state oil firms of Japan and Kenya have signed an agreement to survey the country in East Africa, which has become a hot spot for exploration after the discovery of oil, and assess its onshore petroleum reserves, officials said on Wednesday.

National Oil Corporation of Kenya (NOCK) and Japan Oil, Gas and Metals National Corporation (JOGMEC) agreed to jointly conduct geophysical surveys to help evaluate the commercial viability of hydrocarbons in Kenya.

Geophysical surveys help exploration firms determine areas where drilling is likely to have the most chance of success.
The deal, which will run for an initial year and a half, underlines the interest international oil firms are showing in East Africa and the Horn of Africa following several major oil and natural gas finds in the region.

Underscoring the hectic exploration activity in the region, Africa-focused Ophir Energy Plc said it planned to acquire 3D seismic data on its offshore block L15 in the third quarter of 2012 and to drill an exploratory well there in 2013.

Australian explorer Otto Energy also said it had, through its Tanzanian unit, acquired interests in two blocks in the country where it plans to do an airborne survey from July.

Companies discovered oil in neighbouring Uganda in 2006, and this year explorers found large natural gas deposits off the coast of Mozambique. At the end of March, Anglo-Irish explorer Tullow Oil and its partner Africa Oil Corp discovered oil in northern Kenya, the first oil find in Kenya.

Tullow and Africa Oil have yet to determine whether their find in Kenya is commercially viable. Tullow said on Wednesday it planned to spend up to $750 million jointly with its partners in further drilling in Uganda this year.

It said on Monday the thickness of the oil reservoir in Kenya was greater than initially expected and that it had only drilled to the most shallow depths of the planned well, a significant sign for Kenya's potential as an oil producer.

About two dozen other companies are exploring for oil and gas onshore and offshore Kenya, including NOCK, which is actively exploring the 14T block in the southern part of the country's Magadi Basin. It acquired the block in November 2010.
Ophir, Otto exploration.

NOCK and JOGMEC's first survey on 14T is planned for June 2012. NOCK also said the companies would complete 2D seismic surveys and electromagnetic studies. It does not have immediate plans to drill on the block.

In addition to NOCK's exploration efforts, it operates more than 100 petrol stations, sells its own petroleum products and is charged with helping develop an infrastructure plan to position Kenya as an oil and gas trading hub.

Ophir Energy has a 60 percent stake in Kenya's Block L9, where it is at present acquiring 3D seismic data.
The data acquisition and drilling on block L15, whose licence it fully holds, is part of Ophir's wider programme for its blocks in Kenya and Tanzania.

"The Lamu basin has the potential to contain both gas and liquids as demonstrated by previous wells in the area," it said in its annual report.

Otto Energy said in a statement the government had approved for it to take a 50 percent working interest in the Kilosa-Kilombero and the Pangani blocks licences.

The company said it had already started to reprocess aeromagnetic data on the blocks and planned to do further surveys later in the year. An airborne magnetic and gravity survey is planned to commence in July 2012.


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