Kenya: Tullow scales down Lokichar oil search

Tullow Oil

Tullow Oil

02 February 2015, Nairobi – Tullow Oil said yesterday it has scaled down its exploration and appraisal activities in the oil-rich Lokichar Basin of Turkana county as it gears up for the development phase.

The British oil company that jointly operates blocks 10BB, 13T and 10BA with Canadian Africa Oil Corporation has since February 2012 struck oil resources estimated at 600 million barrels with a potential in the upwards of a billion barrels.

There have recently been concerns on the ground that it was scaling down its drilling activities despite reassuring on January 15 that “high impact, low cost exploration opportunities in East Africa” will remain the focus of its slashed global capital budget.

Tullow has this month further cut its exploration spend to Sh18.31 billion ($200 million) from Sh27.46billion ($300 million) last November.

This followed a dampening outlook on earnings due to the ongoing fall in global crude prices that have hit a six-year low following an almost 60 per cent drop over the last six months.

“Tullow’s exploration and appraisal drilling activities have scaled down in the Lokichar basin and moved north,” senior communications advisor Mercy Kabangi said in an email. “…we are rationalising our footprint in the Lokichar basin as we move towards development hence work associated with this phase (drilling) is also coming to an end.”

An Extended Well Test programme is now planned for South Lokichar, she said, although drilling and appraisal works continues but at a slower pace.

Kabangi said “the extended well testing does not require the presence of rigs”.

The oil and gas life cycle involves transition from exploration and appraisal to development and then production.

Kenya is within the first phase and is now preparing to go into development stage where actual status of oil resource is determined.
*Constant Munda – The Star

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