Petroleum industry in Kenya

Oil industry is relatively new in term of mining and exploration. Oil was first discovered in 2012 by a British firm Tullow oil. As to whether they are commercially viable is still being analysed. Currently the oil industry is controlled by importation and refining.

History

The history of oil marketing in Kenya began in 1903 during colonial times. Initially kerosene was the main import in tins but later gasoline was imported in tins and drums. Royal Dutch Shell established the first depot on the Mombasa island at Shimanzi.

BP and Shell carried out exploration work in the 1950s with the first exploration well being drilled in 1960.Over the past 50 years many other oil and gas companies have tried their luck onshore and offshore,including Exxon, Total, Chevron, Woodside and CNOOC.(Deloitte 2013)

Of 33 wells drilled in the country prior to 2012 16 showed signs of hydrocarbons, but none were considered commercial. Only 4 had been drilled offshore prior to 2012 and of these only 1 (in Block L5, drilled by Woodside in 2007) was in deep water.Following recent successes in Mozambique and Tanzania, offshore exploration has become flavor of the moment and industry confidence was boosted in 2012 by the announcement that Apache‟s Mbawa-1 well (Block L8) had encountered gas. Extensive activity is expected over the next 2 years, with drilling planned by Afren (Block L17/18),Anadarko (Block L12), BG Group (Blocks L10A and L10B)and FAR (Block L6).

In 2006 Uganda the discovery of significant quantities of oil rejuvenated of oil search in Kenya.

Regulators

Oil are regulated by;

Current traders

National Oil Corporation of Kenya, Shell, Tullow Oil, KenolKobil, MOGAS

Exploration blocks

Oil Exploration Blocks in Kenya

According to deloitte 2013, Kenya has 4 prospective sedimentary basins:Anza, Lamu, Mandera and the Tertiary Rift.The Lamu basin extends offshore.

Recent onshore drilling by CNOOC in Block 9 (Anza Basin) proved unsuccessful, despite high hopes and reports of gas finds.Tullow Oil farmed into 6blocks in the Turkana Rift Basin in late 2010 (5 in Kenya and one block in Ethiopia).The geology of this area is similar to that in the Albertine Graben of Uganda and a well drilled in 1992 by Shell found evidence of waxy crude similar to that in the Ugandan arm of the Rift Valley.Tullow is undertakingan exploration drilling campaign in the hope of replicating its recent Ugandan success.On 26 March 2012, it announced an oil discovery in Block 10BB, though it is not yet clear whether this is commercial. A further discovery of oil in Block 13T was announced in November 2012 and drilling in the area continues at the time of writing.A licence auction is expected to take place in 2013. (the map on the left show exploration blocks)

See also

Oil companies in Kenya National Oil Corporation of Kenya

References

    Further reading

    Deloitte 2013. The Deloitte Guide to Oil and Gas in East Africa. Where potential lies

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