Kenya on fast track to join world's exporters

Kenya is ready to join the ranks of oil producing nations, with shipments slated to begin in 2016.

This means Kenya will become the first oil exporter in east Africa.

East Africa has been experiencing a buzz of exploration, particularly since Tullow Oil first discovered oil in Kenya last year.

There have also been discoveries in Uganda and significant gas finds in Tanzania and Mozambique.

Tullow plans to start pumping in Kenya as soon as next year, according to the chief operating officer Paul McDade.

"In Kenya, we [Tullow Oil] have significantly upgraded our resource estimates for the South Lokichar Basin following the highly successful flow testing of Ngamia and Twiga-South. Additionally in Kenya, Tullow has made a new discovery at Etuko-1," says Aidan Heavey, the chief executive of Tullow, in its trading statement and operational update in July.

Mr Heavey goes on to explain additional progress in east Africa.

"In Ghana, the government has approved the plan of development for the TEN project, our second offshore project in the country," he says.

"In Uganda, we have made substantial progress with our partners and the government and expect to sign a memorandum of understanding, which will outline the key principles for the future development of the Lake Albert Basin development.

"We also continue to have an industry-leading exploration and appraisal programme with results from key frontier wells in Kenya, Ethiopia, French Guiana, Norway and Mauritania all expected in the second half of the year," Mr Heavey adds.

Tullow estimates after three discoveries in Kenya's South Lokichar Basin it has found more than 300 million barrels of oil equivalent resources.

The Canadian explorer Africa Oil announced recently it had started drilling a new well in Kenya with Tullow. The company expected it would take about two months to drill and evaluate the content of Ekales-1, located within Kenya's Lokichar basin.

The well was started on July 22, and has a planned total depth of 2,500 metres.

Africa Oil and Tullow each hold a 50 per cent working interest in the prospect.

"The Ekales project is probably one of the lowest-risk prospects in our inventory," says Africa Oil's chief executive Keith Hill in a company-issued press release.

"The proximity and similarity to the existing Ngamia and Twiga discoveries give us a high degree of confidence that we will find oil and continue to build the discovered resources necessary for commercial volume threshold," Mr Hill says.

"The recently announced Etuko discovery on the flank of the Lokichar basin has opened a new play fairway and provided further confirmation of the world-class potential of the Lokichar Basin," Mr Hill adds.

The Etuko well in block 10BB has reached a total depth of 3,100 metres.

After 50 years of disappointments, developments in the Lokichar Basin have "been the key breakthrough", Oswald Clint, an analyst at Sanford C Bernstein & Co, commented last month.

"Of 30 wells between 1960 and 1992, prior to Tullow's entry, 13 were dry, 12 encountered non-commercial gas shows and five encountered signs of oil staining or oil shows."