Oil and Natural Gas in Kenya

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Kenya currently does not produce crude oil, and must import all of the 57,000 bbl/d it consumes. Previous exploration attempts for a domestic source of oil have met mostly with disappointment. However, with the most recent round of exploration performed in the later half of 2003 by Australian-based Woodside Petroleum, Pancontinental, and UK-based Dana Petroleum, and others, hopes are high that the renewed search for oil in Kenya may enjoy greater success. The Kenyan government has spent about $169 million exploring for oil and natural gas over the past 15 years. Over 30 wells have been drilled so far, but without much success. Work is also continuing by the new Kenyan government of President Kibaki to introduce a New Petroleum Bill designed to help better regulate Kenya's petroleum sector.

  • In April 2001, Dana Petroleum was awarded several production-sharing licenses by the Kenya.The blocks - L5, L7, L10 and L11 - situated in the Lamu Basin and represent one-half of Kenya's available offshore concessions.
  • In May 2003, Woodside Petroleum, acquired a 40% stake in those blocks from Dana. Dana will retain a 40% holding, with the remaining 20% stake held by Star Petroleum, a subsidiary of Global Petroleum Ltd. Woodside is now the operator of the blocks. A seismic study was initiated in the third quarter of 2003, after which two exploration wells are scheduled to be drilled.
  • In April 2002, the Kenyan government executed agreements that grant exclusive exploration rights of blocks L6, L8, and L9 to Pancontinental Oil & Gas NL (60%) and a UK-based Afrex Limited (40%). In August 2003, Woodside farmed into the three blocks, taking a 50% operating stake. Afrex will now hold a 30% stake, while Pancon will hold the remaining 20%. In return for its entry, Woodside will undertake the seismic work for the three blocks. A 3,488 mile survey across all seven blocks was completed and sent for data analysis during the fourth quarter of 2003 with results to be available in early 2004.

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