China's CNOOC drills Kenya's deepest oil well

* Exploration well to cost $26 million

* Boghal-1 will reach depth of 5,556 metres

* Results expected in not less than six months

By Daniel Wallis

NAIROBI, Oct 28 (Reuters) - China's CNOOC (0883.HK) spudded a $26 million exploration well in northern Kenya on Wednesday that will be the deepest yet in a country that has searched in vain for commercial oil and gas deposits for decades.

The Boghal-1 well in Block 9 of the Anza Basin is the 32nd drilled in the east African nation, which hopes to capitalise on growing interest in the continent among explorers due to high oil prices and growing energy nationalism elsewhere.

In exploration terms, east Africa lags far behind the other regions with fewer than 500 wells, compared with some 14,000 in west Africa and nearly 20,000 in north Africa.

Kenyan Energy Minister Kiraitu Murungi said Boghal-1 would eventually reach a depth of 5,556 metres and would pass through two possible hydrocarbon horizons at 3,000 and 5,000 metres.

"Kenya has set out its industrialisation agenda ... to expand her energy sector to reach at least 10,000 MW by 2030," he told CNOOC officials at the spudding ceremony, which was moved to a Nairobi hotel because of heavy rains at the site.

Ten wells have been drilled so far in the Anza Basin, but only to a maximum depth of 3,000 metres.

"Boghal-1 is expected to yield many times more data (for) future exploration work than has been obtained from any other oil wells so far drilled in the country," Murungi said, adding that Kenyans should not get excited too soon.

"It will take CNOOC not less than six months before results from the well are known ... I therefore appeal for patience."

Many exploration firms see potential in east Africa, saying poor quality data collected in the 1960s and 1970s wrongly painted it as likely having some natural gas but little oil.

The geology of east Africa is far more complex than in west Africa, experts say, and is only now being studied with the latest seismic and geochemical techniques. The region's location near oil-hungry Asian economies is also a draw.

In April 2006, CNOOC also signed a production sharing agreement for Block L2 of Kenya's offshore Lamu Basin.

"We will work closely with our colleagues to realise a win-win cooperation ... functioning as a bridge between these two great countries," CNOOC Executive Director Wu Guangqi said. (Editing by David Clarke and James Jukwey)