NAIROBI, Kenya — Kenya’s president announced Monday that oil has been discovered in his East African nation for the first time, and a foreign oil firm said the find is similar to the valuable light crude previously discovered in neighboring Uganda.
President Mwai Kibaki cautioned that commercial viability of the oil find in the northwest Turkana region is still uncertain, but he welcomed the news, calling it “a major breakthrough.” The discovery was made over the weekend.
“This is the first time Kenya has made such a discovery and it is very good news for our country,” Kibaki said. “It is however the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years.”
Tullow Oil - which is carrying out oil exploration in the region - said that about 65 feet of net oil pay was discovered at a site called Ngamia-1, in Kenya’s Turkana County.
The oil discovered in northwest Kenya is considered to be high-quality oil that will yield more gasoline and diesel per barrel than some other crude discoveries in Africa.
Tullow’s exploration director, Angus McCoss, called the discovery an “excellent start” to Tullow’s exploration campaign in the rift basins of Kenya and Ethiopia.
“To make a good oil discovery in our first well is beyond our expectations and bodes well for the material program ahead of us,” McCoss said in a statement, adding that the firm is working with Kenya’s government and plans on further seismic and drilling activities.
The oil find was near the border with Uganda and South Sudan. Both of those countries have oil industries.
Tullow said many other prospective sites similar to Ngamia have been identified “and following this discovery the outlook for further success has been significantly improved.”
Echoing Kibaki, Tullow spokesman George Cazenove sought to stress that Kenya was only at the beginning of a long process. He noted that oil was first discovered in neighboring Uganda in 2006and has not yet reached the production stage. Though Uganda will get some oil to market next year, production won’t reach full speed until 2016, he said.
“I think Uganda provides a helpful parallel,” Cazenove said. “There’s a lot more work to do before we talk about how we get this to production and how it would affect Kenya as a nation.”
“It’s a great result but must be seen in context. It’s a long-term game for sure,” he said.
Kenya Energy Minister Kiraitu Murungi was quoted by Kenya’s leading newspaper, the Daily Nation, as saying that Tullow informed him that Kenya’s oil deposits could be bigger than Uganda’s. Cazenove declined to directly comment on Murungi’s claim, but said that Uganda’s and Kenya’s oil potential are similar.
Tullow said the Ngamia well was drilled to 3,415 feet and would now be drilled to about 8,858 feet - a process that will be completed in May.
Moveable oil with an API greater than 30 degrees was found - an industry measurement of how heavy the oil is. Tullow said the oil is light and waxy. Light crude oil has a low density and flows freely at room temperature. Light crude is more valuable than heavy crude.
Tullow, which began its exploration work in Kenya last year, has a 50-percent interest in multiple sites in Kenya and Ethiopia’s Rift Valley basins, covering more than 38,600 square miles. Tullow is partnered with Africa Oil at the site of last weekend’s discovery.
Tullow is using aerial mapping and seismic geotechnology to determine where to drill.
Business, Pages 21 on 03/27/2012