Africa Oil increases Lokichar estimates to 1.6 billion barrels

 

Tullow Oil workers at a drilling rig in Turkana. PHOTO | FILE 

By GEOFFREY IRUNGU, girungu@ke.nationmedia.com

In Summary

• The South Lokichar Basin could contain as much as 1.63 billion barrels of oil worth Sh7.4 trillion ($73 billion) in reserves some of which could be developed as early as next year.
• Africa Oil said that the new estimates had given them confidence that it could get a go-ahead for development of the oil resource next year.
• The 1.63 billion barrels is, however, not confirmed, as it is contingent on drilling. The unrisked amount, meaning that it is already confirmed, as of Tuesday is 766 million with 754 million barrels capable of being developed into usable oil.

The South Lokichar Basin could contain as much as 1.63 billion barrels of oil worth Sh7.4 trillion ($73 billion) in reserves some of which could be developed as early as next year.

In a new update, Africa Oil, which is exploring the area in partnership with Tullow Oil, said that the amount is 26 per cent higher than previously estimated.

“[South Lokichar] may contain as much as 1.63 billion barrels of gross oil contingent resources, an increase of 26 per cent (from previous estimates),” said the company’s president and CEO Keith Hill in a statement.

Africa Oil said that the new estimates had given them confidence that it could get a go-ahead for development of the oil resource next year.

“The level of these resources gives us confidence that we will exceed the threshold required for development and we continue to push forward for development sanction during 2017,” said Mr Hill.

Energy Cabinet Secretary Charles Keter has recently said that Kenya targets to produce oil by next year. Tullow Oil has also hinted that production is possible then.

READ: Kenya assessing viability of shipping oil by rail as it pursues pipeline plan

In a statement, the Canadian-owned Africa Oil said that the findings followed an independent assessment of the basin by a consulting firm, DeGolyer and MacNaughton Canada.

“Africa Oil Corp is pleased to announce that an independent assessment of the company’s contingent resources in the South Lokichar Basin located in Blocks 10BB and 13T in Kenya has been completed by DeGolyer and MacNaughton Canada Limited,” said the company.

The 1.63 billion barrels is, however, not confirmed, as it is contingent on drilling. The unrisked amount, meaning that it is already confirmed, as of Tuesday is 766 million with 754 million barrels capable of being developed into usable oil.

“The estimated gross 2C unrisked resources in the South Lokichar Basin, Kenya have increased by 150 million barrels (or 24 per cent) to 766 million barrels of oil (development pending: 754 million barrels and development unclarified: 12 million barrels),” said the company.

READ: Tullow to resume exploration, ups Turkana reserves

High quality

The areas that are ready for development are Ngamia, Amosing, Ekales, Etom, Twiga and Agete. However, Etuko and Ewoi are not yet ready for development, and were termed “development unclarified.”

For the unrisked (confirmed) resources, Ngamia has the biggest amount of 296.7 million barrels with Amosing and Ekales coming second and third with 151.1 and 104.5 million barrels respectively.