Kisumu
23/10/07
 
CANADIAN GIANT COMPANY SIGNS A DEAL TO EXPLORE FOR OIL IN NORTHERN KENYA.

By Leo Odera Omolo
 
A fresh search for oil has began in earnest in Kenya with a Canadian based Vangold Resources Ltd being granted a license to explore if there existed any deposits in the semi-arid region of North Eastern Province.
 
The Canadian firm has signed a production sharing contract (PSC) with Kenya’s Ministry of Energy to explore oil on an area classified as Block 3A.
 
The latest agreement is the third exploration contract to be signed with international oil company within three weeks. It shows how desperate is the country in search of the oil wealth.
 
Kenya is the only country in the region with very little minerals. Previous attempt to discover oil in the country have ended in failure dashing the hope of many Kenyans of striking it rich like her immediate neighbours the Sudan, Uganda and Tanzania.
 
An area classified as Block 10 A went a Britain Company, Camec International of the UK. Block II was taken by the Geneva based Swedish firm, Lundin International and Block 3A went to the giant Vangold Resources Ltd of Canada.
 
The latest series of signing local exploration with these foreign based multinational oil companies is a clear indication that Kenya has decided to intensify efforts to find oil.
 
The country’s Energy Minister Kiraitu Murungi while signing the exploration contract with the firms said Kenya has come under heavy pressure to explore oil after its neighbours - Tanzania, Uganda, Somalia and the Sudan found the commodity.
 
Although many people here believe Kenya has sufficient deposits in the semi-arid district in the North Rift like Turkana, Baringo and also in the North Eastern Province as well as along her coastal line in the Indian Ocean - all the previous explorations were abandoned after no trace of oil was found.
 
A ministry of Energy spokesman recently said the government will shoot its own seismic data and sell it to prospective oil explorers.
 
‘’Next year, we want to review the situation and dedicate resources in the budget to map data and sell it to companies interested in exploring for oil in Kenya,’’ said Patrick Nyoike who is the Permanent Secretary in the Energy Ministry.
 
The latest increased activity comes against a backdrop of doubts as to whether there is oil in Kenya especially after UK-based woodside came up dry after spending over USD 20 million in the process.
 
Mr. Ashley Heppenetal, the President of Lundin group, who signed the contract on behalf of his firm had this to say during the signing ceremony, ‘’We want to take the risk because it is worth it. Eventually oil will be discovered in Kenya. East Africa is a fertile area for oil and natural gas, he added.
 
Experts, particularly top officials at the Energy Ministry are convinced that there is oil in Kenya.
 
Mr. Don Riaro the chief geologist in the Ministry was recently quoted in the press as expressing confidence that oil discovery in the country was just a matter of time.
 
Contrary to this expectation and hope, many Kenyans are very much aware of the treacherous and intrigues involved in oil politics. Kenyans are very much aware of what happened in the neighbouring Uganda in the early 1970s.
 
Oil companies from Western European countries, US and Canada had discovered large deposits of oil in the Lake Albert area, but the discovery was deliberately shelved and abandoned temporarily due to bad politics of that country at the material time.
 
This happened during the despotic rule of the late Idi Amin Dada. The oil from which had explored the area around Lake Albert packed the machineries and left the country saying there was no trace of oil in Uganda . And the UN was involved in this conspiracy of hiding the oil discovery to the Ugandan government of the time. These firms are now back drilling several oil wells around the Lake Albert and have reported that there is sufficient oil deposit worth drilling for commercial purposes.
 
Riaro was quoted as saying ‘’there is no doubt that there is great potential for hydrocarbons call in Kenya. What, however, remains to be established is whatever it is commercially viable.’’
 
Riaro pointed out that companies such as Chinese Natioanl Oil Company (CNOC), UK - based Comec International, Lundin Petroleum and Vangold Resources have committed to drill a well each within the next three years.
 
Oil exploration in East Africa’s rift valley basin has increased, especially after the discovery of oil in Uganda by Australian firm Tullow Oil. With the Ugandan discovery significant data was obtained on the rift basin and potectial source rocks that host hydrocarbons.
 
For years, petroleum geologists had discounted the potential of oil being discovered in the region.
 
Vangold’s block in the Anza basin, where Lundin and CNOC are also exploring has harsh exploration conditions mainly because of volcanic rocks covering the region, making it difficult to obtain seismic. But with modern technology, especially the three dimension seismic technology, it was now possible to see accurate data; Mr. Riaro was quoted by a respected Nairobi based weekly, the East Africans as saying.
 
The paper further quoted Vangold President Dal Brynelson as saying that his company has chosen Block 3A on technical merit based on a study its experts had conducted in the area.
 
During the study, the company’s geologists found five prospects and one lead. The next phase will be to reprocess and the lead. The next phase will be to reprocess part of the seismic data with new technology in order to ascertain if the prospect is a deep structure and if the rocks host hydrocarbons.’’ If the results are positive, the company will first track its drilling programme.
 
Vangold, said Mr. Dal Brynelson, had already established its office in Kenya and has hired local experts who have many years of experience with companies such as Natioanl Oil Corporation of Kenya, Amaco and Shell.
 
Vangold is hoping to share technical resources and data with CNOC and Lundin who are also active in the Anca basin.
 
Experts are quick in pointing out that International Oil exploration companies that have in the past concentrated on West and South Western Africa are now seeking opportunities in new areas of the African continent, partly spurred by high global oil prices.
 
Ends.
leooderaomolo@yahoo.com