Tullow Oil, partners start drilling third well in Kenya

Mon Oct 1, 2012 4:04am EDT

Related Topics

* The well, Paipai-1, has a planned total depth of 4,112 metres

* Searching for oil, rather than natural gas

* If successful, would be Tullow's second oil discovery in Kenya

By Kelly Gilblom

NAIROBI, Oct 1 (Reuters) - British explorer Tullow Oil Plc and its Canadian partner Africa Oil Corp started drilling a third well in Kenya, extending a campaign to discover more reserves after finding oil in the east African country earlier this year.

Drilling of the well, known as Paipai-1 and located in northern Kenya's Marsabit County, started on Saturday. Its planned total depth is 4,112 metres and it could have as many as 121 million barrels of crude oil, Africa Oil said. Tullow hopes the well will encounter oil, rather than gas.

"A discovery at Paipai would extend the producing plays of Sudan into Kenya and open a potentially significant and new petroleum province within Kenya," Keith Hill, Africa Oil's chief executive, said in a statement.

East Africa has become a hotbed of exploration after several petroleum discoveries in the area pushed the region into the international limelight. However, Kenya has yet to determine whether it has commercially viable quantities of hydrocarbons.

Paipai-1 on onshore Block 10A is a joint venture of Tullow, the well operator with 50 percent of the exploration license, Africa Oil, holding 30 percent, and London-listed Afren, with the remaining 20 percent.

Tullow is already drilling one other well in Kenya, known as Twiga-1, on Block 13T, about 30 kilometres west of where it made its oil discovery in March. Hill said the results of this well are expected before the end of October.

The British company also was a venture partner in the offshore well, Mbawa-1, that encountered gas. However, Mbawa's operator Apache Corp said it had hoped to find oil and there was insufficient gas to justify costly investments in liquefied natural gas facilities and pipelines.

If Tullow finds oil for a second time in Kenya, it may spur investment in infrastructure projects, such as a refinery and pipeline to its coastal ports.

Kenya's energy minister Kiraitu Murungi said he thought the country had enough petroleum to warrant both projects.

"We are becoming the new Middle East," Murungi said at a press conference in August.

Tullow indicated it would be at least a year before it knows whether its March discovery can be extracted and exported.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.