Total Looking to Explore Oil in Kenya - Kenyan Government
August 09 2011 - 1:26PM
Dow Jones News
A unit of French oil giant Total SA (TOT) is pursuing oil and
gas exploration in Kenya, a top Kenyan official said Tuesday,
marking the latest sign of the East African country's rise as an
international petroleum prospect.
Total Kenya Ltd has shown early interest in exploring oil in
Kenya, said Martin Heya, Kenya's commissioner for petroleum. Heya
said the company approached the Kenyan government in May about a
specific block, and Total is waiting for the government to survey
the block and negotiate.
A Total spokeswoman declined comment, but said it's normal for
Total SA to look at opportunities in place where it hasn't yet
explored.
Total's approach comes as Kenya attracts increasing interest
from international oil giants in light of its proximity to other
hot East African countries that have seen major oil and gas
discoveries in recent years.
Africa is never an easy place to operate, given challenges of
weak infrastructure and a reputation for corruption. But oil
companies continue to view African countries - and increasingly,
the relatively unexplored Kenya - as good options for new
drilling.
In May, BG Group Plc (BG.LN) signed production sharing
agreements on two offshore blocks in Kenya, covering an area of
10,400 square kilometers in the Lamu basin. Tullow Oil PLC (TLW.LN)
will start drilling in the fourth quarter of 2011. U.S. independent
Anadarko Petroleum Corporation (APC) also has a big presence.
Nick Copeman, an analyst at Oriel Securities, said Kenya could
be especially well positioned if there is success in neighboring
Tanzania.
Despite the race from companies to gobble up acreage in Kenya,
companies say it's too early to tell how much oil Kenya could hold.
Heya described the current scramble for oil in Kenya as
unprecedented. Kenya doesn't currently produce oil.
Andrew Cochran, the chief executive of London-listed Dominion
Petroleum (DPL.LN), said Dominion has been in talks with other
companies interested in joining its Kenya venture, but that the
company is still in early stages. Dominion will sign its second
exploration agreement with the Kenyan government in the next six
weeks, but it won't start drilling until it acquires seismic
data.
Founder Hassan Hassan of British Columbia-based Simba Energy,
which last week joined the growing number of companies exploring in
Kenya, said there's huge opportunity because some of its geology in
Kenya mirrors that of Uganda, which has quickly risen following
high-profile discoveries.
- By Jenny Gross, Dow Jones Newswires; +27 11 784-8347;
jenny.gross@dowjones.com