Kenya

Tullow Oil PLC took a farmout from Centric Energy Corp., London, to earn a 50% participating interest in Block 10BA in northwestern Kenya, on which it will become the operator.

Aug. 5, 2010

2 min read

By OGJ editors
HOUSTON, Aug. 4 – Tullow Oil PLC took a farmout from Centric Energy Corp., London, to earn a 50% participating interest in Block 10BA in northwestern Kenya, on which it will become the operator.

Tullow will reimburse 50% of Centric Energy’s acquisition costs for the PSC, which total $750,000. It will also pay 80% of the first $30 million of spending under the PSC and will assume 80% of the bank guarantees and parent company guarantees while it is paying the 80% of expenditures.

The block covers more than 4 million acres in the East African Rift System and contains a prospective resource best estimate of 2.188 billion bbl of oil equivalent in undiscovered accumulations. The block is in a part of the rift system that includes parts of several Tertiary-age rift subbasins, including the Kerio and Turkana basins and the northern part of the Lodwar basin.

Shell Exploration (Kenya) drilled the Loperot-1 well in 1992 in the southern Lodwar basin 75 km south of Block 10BA and found oil shows and mature source rocks, demonstrating the presence of a petroleum system.

The Anza graben, which underlies the northern part of the block, provides further exploration opportunities and upside potential. Studies of old, existing seismic data by Centric Energy show the presence of a very thick sedimentary section in this area, presumed to be of Tertiary and Cretaceous age. Shooting new seismic will considerably improve the understanding of the hydrocarbon potential of this area, in addition to the remainder of the block.