Wednesday, February 4, 2015 Kisumu block estimated to hold 22m barrels of oil, says company

 

An oil drilling site. Swala Energy, an Australian oil and gas company with prospecting rights in Kisumu, estimates that the first well in Block 12B within the Nyanza Rift basin could have as much as 22 million barrels of crude deposits. PHOTO| FILE  NATION MEDIA GROUP

In Summary

• Nyanza Rift basin, where Block 12B is located, lies within the East African rift system, which is also home to Lokichar Basin where more than 600 million barrels of crude oil have been discovered since March 2012.
• The industry it is said can be viable at prices above $70 a barrel. Saudi Arabia says it can only survive the current prices for a maximum of 4 years beyond which it will to take desperate measures.

By NATION REPORTER
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Swala Energy, an Australian oil and gas company with prospecting rights in Kisumu, estimates that the first well in Block 12B within the Nyanza Rift basin could have as much as 22 million barrels of crude deposits.

The firm holds equal exploration interest in the block with UK’s Tullow Oil, which together with its partner, Africa Oil Corporation of Canada, has been responsible for most discoveries in Kenya.

Swala and Tullow have set the second half of the year as the target date for drilling Ahero-A well, which will mark beginning of the oil search in Kisumu.

Nyanza Rift basin, where Block 12B is located, lies within the East African rift system, which is also home to Lokichar Basin where more than 600 million barrels of crude oil have been discovered since March 2012.

DRILLING TARGET
“The seismic survey over 12B that was completed in the second quarter of 2014 revealed a number of leads and prospects of which Ahero-A was provisionally identified as a potential drilling target for 2015. The prospect is estimated to have the potential to contain up to 22 million barrels,” Swala said in its quarterly report for the period ended December 2014.

The announcement comes as the global prices of crude oil remain low, currently trading at below $50 a barrel.

Analysts have also cautioned that prevailing prices are too low for profitable oil production, but explorers reckon that the current prices are just momentary and that things will normalise. The industry it is said can be viable at prices above $70 a barrel. Saudi Arabia says it can only survive the current prices for a maximum of 4 years beyond which it will to take desperate measures.

Most international oil and gas companies, including those operating locally, have announced plans to scale down operations to deal with the impact of the weak prices.