Total snaps up stakes in five Kenya oil blocks

21 September 2011, Sweetcrude, Nairobi- Total has made a major play off East African, snapping up a huge chunk in five Kenyan offshore blocks.

The French supermajor has hatched farm-in agreements with US stalwar, Anadarko and London-listed independent Cove Enervy, for the quintet of blocks in the Lamu basin, it announced on Wednesday.

The deal for a 40% cut in the blocks follows earlier reports that Total was eyeing acreage in Kenya although it was unclear if this would be on shore or offshore.

Total is taking 20% of Anadarko’s share in blocks L5, L7, L11a, L11b and L12 although the latter will stay on as operator with a 50% share. The French player is also getting its hands on 5% of Cove’s holding in the blocks with Cove holding on to a 10% cut.

The agreement sees Dynamic Global Advisors sell out its entire 15% stake in the blocks to Total, however.

The blocks cover a total area of 30,500 square kilometres with water depths ranging from 100 to 3000 metres. A 3D seismic survey programme is currently underway.

No purchase price was revealed but Cove said drilling operations are set to kick off in the second half of next year.

Total’s senior vice president for exploration, Marc Blaizot, commented: “This transaction is part of a bold exploration strategy that consists in acquiring large stakes in high-potential frontier plays.

“Recent discoveries in offshore Mozambique and Tanzania offer a very promising outlook for these Kenyan permits.”

Last month news wire Dow Jones reported that Total had shown an early interest in one block in Kenya.

The report cited Kenyan petroleum official, Martin Heya, as saying Total Kenya Limited was in contact with the government in May with regards to acreage.

Kenya represents a new frontier in oil and gas exploration as the country does not currently produce any oil.

Total has been active in East Africa recently after being awarded oil and gas exploration rights in neighbouring Tanzania last month. Total beat off competition from nine other bidders for the acreage on the northern side of Lake Tanganyika.

The Tanzania Petroleum Development Corporation has divided the Tanzanian side of Lake Tanganyika into two blocks, with the southern portion awarded to Australia’s Beach Energy in 2008.

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