Canada’s Octant buys Afren Oil Kenya, Tanzania assets

Money Markets

Tullow's oil rig at Ngamia 1 in Turkana County. Discovery of oil in the county has sparked foreign explorers’ interest in Kenya. PHOTO | FILE 

By John Gachiri

In Summary

• Octant said it bought Block L17/L18, located in the Lamu Basin, Block 1 in the Mandera Basin and Afren’s other assets in Tanzania.
• Afren has been in financial dire straits due to the unfavourable market for explorers, a result of low oil prices in the international market for an undisclosed amount.
• Explorers have been scaling down on operations and selling their assets in light of the low prices of the commodity that have made raising funds difficult.

Canadian Octant Energy has bought Afren Oil Kenyan assets for an undisclosed amount.

Octant said it bought Block L17/L18, located in the Lamu Basin, Block 1 in the Mandera Basin and Afren’s other assets in Tanzania.

“I am encouraged to be working with assets I know well from my past experiences. This portfolio that Octant has secured is pivotal in the future development of Kenya and Tanzania as they further move towards energy security and domestic growth in the countries.

“For me, being a part of East African growth and development again is a great opportunity and privilege,” said Octant chief executive Richard Schmitt.

Afren has been in financial dire straits due to the unfavourable market for explorers, a result of low oil prices in the international market.

Explorers have been scaling down on operations and selling their assets in light of the low prices of the commodity that have made raising funds difficult.

Australia’s Pancontinental Oil withdrew from Block L10B, where it had a 25 per cent interest, in April and in June exited Block L10A where it owned 18.75 per cent.

Tower Resources of the UK exited the Kenyan market and decided to focus on areas that have greater potential. It had a 15 per cent interest in the Block 2B in the Mandera region.

READ: Australian explorer pulls out of second Lamu oil block

“We have now refocused our portfolio and resources to areas predominantly on the Atlantic margin where we are confident we can add value even in this difficult market.

“Accordingly, we have withdrawn from areas where we feel there is no medium-term likelihood of commercially worthwhile success,” said Tower Resources chief executive Jeremy Asher in September.

The sale of Afren assets will be finalised after regulatory approvals