Business
Kenya strikes natural gas – though amount not yet commercial
(Reuters) — Kenya’s first offshore gas discovery is encouraging but not large enough for commercial production, the country’s energy minister revealed on Tuesday.
Exploration firms Tullow Oil and Pancontinental Oil & Gas announced on Monday their licence consortium’s operator Apache Corp had found gas in the shallow target of offshore well Mbawa-1.
However, Tullow Oil dashed hopes that oil might be found at the lower depths of the well on Tuesday, saying that no oil or gas had been found there and that the well would now be plugged and abandoned.
“The total amount of gas found is not sufficient in isolation to be commercial. We are however, encouraged that a reservoir containing hydrocarbons has been found,” Kenya’s Energy Minster Kiraitu Murungi told a news conference.
Exploration firm Apache, which has a 50 percent stake in the L8 licence block where Mbawa-1 is located, said on Tuesday the well would have needed to contain at least around 3 trillion cubic feet (85 billion cubic meters) of natural gas to make it worthwhile to install the infrastructure needed to produce, liquefy and distribute it.
Even so, the managing director of Apache Kenya, Tim Gilblom, said the find would encourage other companies holding licences in Kenya’s other offshore blocks, including Anadarko and Britain’s BG Group.
“The fact that we’ve proven that there is a hydrocarbon source below these basins gives them a higher chance of success, I would believe. So it’s got to be good news for them,” Gilblom told reporters.
