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Africa
Kenya discovers first 'major' oil deposit
High-quality oil found in nation's northwest, bringing optimism but also concerns fueled by neighbours' experiences.
Last Modified: 26 Mar 2012 19:30
British firm Tullow announced its first oil discovery in Kenya, saying it was found in the north of the country [Reuters]

Kenya's president has announced 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 neighbouring Uganda.

President Mwai Kibaki cautioned on Monday 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".

"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 and has a 50 per cent interest in multiple sites in Kenya and Ethiopia, said that 20 metres of net oil pay was discovered at a site called Ngamia-1 in Kenya's Turkana County.

High-quality oil

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.

Many in Sudan, which recently saw its southern portion secede after a vote in January 2011, consider oil a "curse" for the conflicts and exploitation they said it brings to the region.

Bitterly fighting over land and oil, violence continues between Sudan and South Sudan, with clashes breaking out in several disputed border regions on Monday.

African neighbours

Tullow said many other prospective sites similar to Ngamia have been identified, and echoing Kibaki, Tullow spokesman George Cazenove sought to stress that Kenya, which is fighting a serious economic slump, was only at the beginning of a long process.

He noted that oil was first discovered in neighbouring Uganda in 2006 and 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.''

Kiraitu Murungi, Kenya's energy minister, 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 1,041 metres and would now be drilled to about 2,700 metres, a process that will be completed in May. 

The type of oil found in the Ngmia, light and waxy, has a low density and flows freely at room temperature. Light crude is more valuable than heavy crude.

Source:
Agencies
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