Natural gas find puts Kenya on the map of potential energy exporters

What you need to know:

  • An Australian oil prospecting company, Pancontinental, which is involved in drilling, said it has so far found approximately 52 net metres (about 170 feet) of natural gas pay at the Mbawa deep-water well
  • The discovery in the deep sea could see Kenya join the ranks of Tanzania and Mozambique that are shaping up as potential rivals to major gas exporters such as Australia
  • The discovery comes at a time when Kenya’s appetite for discovery of oil and gas is at an all-time high, following the Turkana oil discovery in March

Kenya has struck its first substantive natural gas deposit about 60 kilometres east of Malindi in Coast, further raising its profile as a potential oil and gas exporter.

An Australian oil prospecting company, Pancontinental, which is involved in drilling, said it has so far found approximately 52 net metres (about 170 feet) of natural gas pay at the Mbawa deep-water well. (Read: Kenya strikes natural gas near Malindi)

The Mbawa 1 exploration well was drilled to a depth of 2,553 metres.

“While we have not finished operations in Mbawa 1, this gas discovery is very promising and it is the first substantive hydrocarbon discovery offshore Kenya.

Potential rivals

“We are delighted to prove that there is a working hydrocarbon system offshore Kenya,” Mr Barry Rushworth, Pancontinental Chief Executive and Director of Pancontinental said in a statement.

The discovery in the deep sea could see Kenya join the ranks of Tanzania and Mozambique that are shaping up as potential rivals to major gas exporters such as Australia.

An American firm, Apache Corporation, is the operator of the Mbawa 1 well, in a joint venture with three other exploration companies.

Apache Corp owns 50 per cent, Origin Energy Ltd (20 per cent) and Pancontinental Oil and Gas NL (15 per cent). Tullow Kenya BV that is behind the Turkana oil find in March, owns the remaining 15 per cent.

Mr Rushworth said they have started further work to evaluate the size of the discovery and have resumed drilling, targeting 3,275 metres.

“With drilling continuing to a deeper exploration target, these interim results may be the first part of the story in this well. They are certainly just the beginning of the main story of oil and gas exploration offshore Kenya,” Mr Rushworth said.

At least three years

The firm did not, however, reveal how long it will take to start exporting gas if found in commercial quantities, but it is expected to take at least three years, going by similar finds.

The discovery comes at a time when Kenya’s appetite for discovery of oil and gas is at an all-time high, following the Turkana oil discovery in March. (Read: Hopes high as two firms triple oil estimates for Kenya at key blocks)

The country has already leased out all existing 46 oil blocks to exploration companies for intensified search.

The gas find has further spurred activity in the East African region, which has emerged as a hot spot for oil and gas exploration in recent years, boosted by new finds in Uganda, Tanzania and Mozambique.

Pancontinental has four projects offshore Kenya covering more than 18,000 square kilometres in licences L6, L8, L10A and L10B, with the L8 Mbawa project being the most advanced and Mbawa being the first prospect to be drilled.

A recent geological survey by the United States estimates that the region has more natural gas than Nigeria, which is Africa’s biggest energy producer.

The survey estimates that over 250 trillion cubic feet (7.1 trillion cubic metres) of natural gas may lie in Kenya, Tanzania and Mozambique, compared to the 186 trillion cubic feet for Nigeria.