Kisumu explorer receives offers for part of oil stake

Money Markets

Swala Energy is set to drill for oil at Block 12B at an area called Ahero ‘A’ near Kisumu from next July. PHOTO | FILE 

By GEOFFREY IRUNGU

In Summary

• Swala Energy, listed on the Australian Stock Exchange (ASX), decided to consider new partners after contracting Canadian FirstEnergy Capital LLP to advise it on a strategic review of the company’s business.

Australian Swala Energy, exploring for oil in Kisumu in partnership with Tullow Oil, has received offers to buy part of its stake.

Swala announced in a brief press statement it was evaluating the offers but did not reveal which companies had put in bids to buy its share.

In Kenya, the firm’s prospect is in Block 12B, which is estimated to hold 44 million barrels of oil worth Sh231 billion at the current crude price of Sh5,282 ($57).

The firm has other exploration assets in Tanzania and Zambia.

The Block (12B) is 50 per cent held by Swala Energy while Tullow Oil holds the other Stake. Swala’s 50 per cent is what is at stake.

Last year, Swala sold a 25 per cent stake to another explorer CEPSA—a Spain-based firm owned by Abu Dhabi’s sovereign wealth fund—but later bought it back after the latter declined to participate in the drilling of the first well in the block.

Swala Energy, listed on the Australian Stock Exchange (ASX), decided to consider new partners after contracting Canadian FirstEnergy Capital LLP to advise it on a strategic review of the company’s business.

“Swala Energy Ltd announces that, following the completion on the March 31 strategic review process managed by FirstEnergy Capital LLP, the Company has received a number of expressions of interest from credible parties wanting to farm into one or more of Swala´s licences,” said Swala in a statement.

Without giving more details, the firm said it would update the market in due course.

“The Company will evaluate these offers and looks forward to updating the market in due course,” said Swala Energy.

The company is set to drill for oil at Block 12B at an area called Ahero ‘A’ near Kisumu from next July.

The prospect is being considered the first potentially viable candidate for oil after geological surveys in the area.

Already, oil has been discovered mainly at the Lokichar Basin in Turkana County’s Block 10BB and Block 13T.

Swala’s joint venture partner Tullow Oil has hinted that production from the discovered reserves could start within four years.