U.S. Oil Firm Begins Search off East Africa

Oil drilling platform
East Africa has become a new frontier of exploration

US oil and gas explorers Apache Corporation estimates that within the next 60 days, it will have drilled the targeted 3,250 metres depth at the exploratory well at Mbawa1 Prospect in the offshore block L8 well within Lamu basin.

Apache has already drilled 1519 metres below the drill floor since the exercise started on 10th August 2012. The exercise and now the actual drilling is on hold as the company carries out more preparations for safe drilling known as casing.

The drillship, Deepsea Metro 1, is working from 864 metres water depth above the drilling floor. L8 block Mbawa well is a joint venture between Apache Kenya with 50 per cent share which is also the operator, while Origin of Australia owns 20 per cent, Tullow oil, the British based company that struck potentially major oil find in Turkana owns 15 per cent. Pancontinental Oil & gas also from Australia holds 15 per cent. “We are pleased that the L8 joint venture has commenced drilling Mbawa which is the first of a number of prospects that we have in our Kenyan projects,” Pancontinetal’s chief executive Barry Rushworth said in an announcement to the Australian Securities Exchange.

“The economics of oil developments are far better than those of gas with potential for much earlier cash flow and much lower costs”. Pancontinental will initially retain a 15 per cent interest in L8, from which Tullow will have an option to earn a further 5 per cent by funding Pancontinental’s share of any second well to a maximum of six million dollars.

Rushworth said they are in a very aggressive exploration programme that will include its other blocks in Kenyan, block L10A and L10B. The company has four blocks off the Kenyan coast covering 18,000 square kilometers with Mbawa1 as the first to be drilled. Mbawa Prospect has been described as a world-class potential for oil and gas with volumetric potential easily exceeding one billion barrels of oil.

Tullow has placed the odds of the well’s success at 15 per cent, while Pancontinental has estimated the well could contain as much as 4.9 billion barrels of oil. The East African oil and gas exploration activities have increased dramatically in the last two years following discovery of huge gas deposits in Tanzania and Mozambique, oil in western Uganda and high prospects in Northern Kenya. Both Uganda and Kenyan oil finds were by Tullow oil, which so far has had success in its first attempts at drilling in the region.