Nock lab to test samples in oil search

State-owned National Oil Corporation of Kenya (Nock) plans to build a new geological laboratory to test samples from exploration activities in the region.

The company, which owns and operates Kenya’s only such lab, wants to tap the increased demand for laboratory services in East Africa following increased activity in the sector.

“A lot of exploration is happening around us, but samples are flown outside the country for analysis.

Exploration hotspot

“We are looking for an international company to partner with us in setting up the new laboratory,” Nock’s managing director Sumayya Athmani-Hassan said in a press briefing in Nairobi on Tuesday.

East Africa has become a hotspot for oil and gas exploration in recent years, driven by oil finds in Kenya, Uganda, Tanzania and Mozambique.

But Ms Athmani-Hassan cautioned that the country needs to manage the expectations of Kenyans, given that the current oil find is far from being declared commercially viable, while exploration will take even longer.

“We need to prepare Kenyans for both scenarios, where it can be declared viable or not. But most importantly, the debate should now be: Are we adequately prepared for the oil revenue?” Ms Athmani-Hassan posed.

She added that should the oil be commercially viable, then Kenyans should know that it would take another six years to use it.

Float tenders

Nock says it has already completed feasibility studies on both the strategic oil reserves, which are expected to ease disruptions in the supply chain, and the jetty project, and should float international tenders next month.

“We are required to have at least 90 days of oil reserves and we plan to put up the tender for the infrastructure next month,” she said.

Kenya has no strategic reserves and relies on oil marketers’ 21-day oil reserves required under industry regulations.

Ms Athmani-Hassan said the strategic oil reserves will cost about Sh130 billion ($1.5 billion), while the jetty will cost about Sh22 billion ($260 million).

“These projects will be run through a public private partnership,” she said.