New York Listed Firm Joins Scramble for Kenya Oil Blocks
A New York Stock Exchange listed independent oil firm has signed a deal for a large chunk of three exploration sites, highlighting growing interest by foreign firms in search of the product locally.
Camac will acquire a 90 per cent stake in each of the blocks â€“ one of them being at Lotikipi near the Ugandan border and two more in Lamu basin. The remaining 10 per cent stake will be held by the Kenyan government.
The discovery of oil in Uganda and Mozambique, countries with similar geological structures, has put Kenya on the radar of major oil explorations sparking acquisitions and mergers in the scramble for oil blocks.
â€œNot only is Kenya home to some of East Africaâ€™s most prospective basins, but the awarded Blocks are adjacent to those owned by proven explorers Tullow, Apache, and Ophir,â€ said Kase Lawal, the CEO of Camac Energy in a statement. â€œFurthermore, with this agreement Camac Energy will enter East Africa on its preferred terms as an operator with the ability to control the pace of exploration.â€
The purchase agreement sets the stage for negotiations on production sharing contracts and payment of acquisition fees to the Kenyan government.
The first of the Lamu basin sites, Block L1B, is 1,699 square kilometres onshore and 89 square kilometres offshore at the countryâ€™s southeast coast. The second part of this same block is entirely onshore in the Lamu basin in an area covering 12,197 square kilometres and is located near the fractious Somali border.
Camac will also get its hands on Block 11A, which covers an area of 10,913 square kilometres onshore in the Lotikipi basin of northwest Kenya near the Ugandan border. This block is located adjacent to four Tullow blocks while the L1B block is close to two Vanoil Energy-operated blocks â€“ some of the two top companies already prospecting for the product in the country.
The entry of such multinational prospectors with greater financial muscle has seen smaller players like Cove, Origin Oil, and Pancontinental either exit the scene or remain with minority interests through buyouts.
BG Group acquired two blocks in Lamu in May last year while Apache Oil acquired a stake from Origin Energy.
French multinational Total also acquired a 40 per cent stake in five blocks within the Lamu Basin from Anadarko Kenya Company Cove Energy with the brief of accelerating exploration work that was burdensome to the twin firms.
These stake claims on Kenyaâ€™s exploration business has led policymakers to believe that the country could strike oil in coming months. The formal signing of the production sharing contracts is scheduled to take place within the next 30 days.
The country is yet to strike oil despite increased exploration work in recent years; this has been blamed on lack of resources by small independent explorers who have been holding their licenses for speculation.
Source: Business Daily Africa