TULLOW Oil has made the first major oil find outside Turkana county after tests at Kerio Valley showed positive prospects for significant deposits.
The British exploration firm said yesterday that it had encountered "good oil shows" from cuttings and rotary sidewall cores made at Kerio Valley's Cheptuket-1 well in Block 12 A. Kerio Valley is in Elgeyo Marakwet county.
"The strong oil shows encountered in Cheptuket-1 indicate the presence of an active petroleum system with significant oil generation," Tullow said in an operation update yesterday.
The firm said a post-well analysis is underway to determine its future exploration programme in the basin.
Tullow has 40 per cent shares in Block 12A, Delonex Energy has 40 per cent while Africa Oil Corporation holds a 20 per cent stake.
“This is the most significant well result to date in Kenya outside the South Lokichar basin. Encountering strong oil shows across such a large interval is very encouraging indeed. I am delighted by this wildcat well result and the team are already working on our follow-up exploration plans for the Kerio Valley Basin," said exploration director Angus McCoss.
In December, Tullow announced discovery of high quality oil reservoirs at its Etom-2 well in South Lokichar, boosting the firm's business outlook and Kenya's oil potential. In Lokichar, Tullow reported finding 102 metres of net oil pay in two columns in the Etom-2 well in Block 13T located in Northern Kenya.
The announcement spurred debate on social media with some people skeptical over the new find accusing the firm of trying to boost its share price.
However Tullow told the Star the oil update announcements are mandatory because it is listed at the London Stock Exchange and is also a regulatory requirement under the licence agreement from the Government of Kenya.
"Neither we or Africa Oil are allowed by stock exchange rules to keep these to ourselves. The Cheptuket well results is
significant as it is in a new sedimentary basin and demonstrates presence of working hydrocarbon," the firm said.
Meanwhile Energy Cabinet secretary Charles Keter said yesterday the government is finalising a settlement deal with Indian investors Essar who sought to exit from a joint oil refinery venture.
Keter said yesterday that Kenya Pipeline and Kenya Petroleum Refineries Ltd are already working together to modernise the refurbishment of the worn out tanks at the refinery as the country's exploration activities continue.
The CS said the tanks will need to be refurbished because oil expected from Turkana is waxy, and would need to be heated.
KPC , Keter said, will take over and refurbish the aging refinery, which the government intends to use for processing the initial oil obtained from Kenya's blocks.
“Essar group was not able to put in the necessary capital needed to improve the facility, and the government made a decision and the deed of settlement will be signed by treasury, pay the money and we say goodbye,” he said.
Kenya will pay Essar group $5 million(Sh505 million) by end of next week,latest, the CS added.
Keter further said that the government will hold negotiations with Uganda over the fate of a new pipeline project by the two countries. construction of the Northern corridor pipeline. He also refuted concerns that Total could be bulldozing the process, saying that the two countries are in charge of the process.