Ministry to create new oil and gas blocks

The oil rig at Ngamia 1 in Turkana County on April 5, 2012. Media Council of Kenya (MCK) is warning of conflicts with local communities if the government is not open on the sharing of profits from minerals. PHOTO | STEPHEN MUDIARI |

What you need to know:

  • Targeted units will be constituted from blocks 10A, L15 and L8
  • The targeted blocks during this year’s revision will be constituted from block 10A that was given up by Tullow Oil Plc and blocks L15 and L8 surrendered by Dominion and Apache respectively, among others.

The Energy ministry is planning to create at least eight new exploration blocks from the ones that have been surrendered by locally operating companies as the search for oil and gas gathers steam.

This will add to seven others that were carved out of existing blocks last year, but which the Cabinet secretary for Energy and Petroleum Davis Chirchir is yet to gazette to pave the way for licensing to exploration companies.

“Since the first oil discovery in 2012, we have seen very high interest in applications for blocks. We are currently doing the third revision and we expect that the total number of blocks will be about 61 by the end of this year,” commissioner for petroleum at the ministry of Energy, Mr Martin Heya, said. He was speaking yesterday at the third East Africa upstream summit organised by the Petroleum Institute of East Africa.

At the moment, the total number of gazetted blocks stands at 46, having increased from 25 which existed before the first revision was conducted in 2006. Of the gazetted blocks, 41 have already been licensed to 21 international oil and gas exploration firms.

The targeted blocks during this year’s revision will be constituted from block 10A that was given up by Tullow Oil Plc and blocks L15 and L8 surrendered by Dominion and Apache respectively, among others.

Kenya has struck commercially viable quantities of oil in the northern part of the country. Government records put the recoverable oil reserves at 600 million barrels while the total crude reserves in Lokichar basin, where the oil finds have taken place, are estimated to be about one billion barrels.

REVENUE
The Energy ministry has since last year put on hold licensing for new blocks as it awaits a review of the current Petroleum (Exploration & Production) Act which it says would secure more revenue for the government from the blocks.

However, in June, Mr Chirchir said that the government is mulling issuance of oil and gas exploration blocks under the current law to meet growing demand from international oil and gas companies as enactment of a new law seem to delay.