By IMMACULATE KARAMBU
British Oil explorer Tullow Oil has confirmed that Kenya’s oil resources meet the threshold for commercial viability.
In statement accompanying the company’s half year results for 2013 released on Wednesday, the oil firm said that it will start negotiations with the government on the option of development and production of the resource.
“The excellent results to date onshore Kenya are an important step towards understanding the overall basin potential and its commerciality. Resources developed to date are of a scale that the partnership will initiate discussions with the government of Kenya and other relevant stakeholders to consider development options,” read part of the statement.
Tullow first discovered oil in Kenya in March last year, at the Ngamia-1 well located within Block 10BB in the Lokichar basin.
The company has to date drilled five exploration wells, out of which three; Ngamia-1, Twiga South-1 and Etuko-1 have encountered significant oil deposits.
With the latest oil discovery at the Etuko-1 well, the company has raised its oil resource estimate for Kenya by 20 per cent from 250 million barrels to the present estimate of 300 million barrels of oil.
The planned discussions with the government will include consideration of setting up a “start-up phase” oil production system with a potential to deliver significant production rates with oil exports through road and rail ahead of the establishment of a full-scale pipeline system, according to Tullow.
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