Kenya News -- While the news of falling oil prices has been bad enough for
Nairobi and a host of international companies spearheading exploration
activities in the country, there are signs that this will not have significant
impact of the pace of oil search in the country. This is the tone set by Tullow oil, one of the key companies
spearheading oil exploration in Kenya and other East Africa countries.
Tullow’s CEO, Aidan Heavey, had the following to say:
In light of current
oil and gas sector challenges including the commodity price environment, we are
reviewing our capital expenditure and our cost base to ensure that Tullow is
well positioned for future success.
Our overall
exploration spend will be significantly reduced and will focus primarily on
East Africa where we have major basin opening potential,” said Tullow’s chief
executive officer Aidan Heavey. It targets to reduce the net exploration and
appraisal budget for 2015 by $300 million, a situation that is likely to affect
the firm’s exploration activity in Kenya.
High Hopes in Kenya
While exploration activities are expected to slow down
considerably on the global scale, Kenya is one country in which oil exploration
has a high chance of paying off. Commerciality has already been confirmed in
wells dug in the Lokichar basin alone, and there are several other blocks with
similar geological formation and which are expected to give good results.
However, this does not imply that companies involved are not working on ways to
cut their exploration spending.
According to the Kenya Oil and Gas Association, the umbrella
organization for local oil explorers, each company will is expected to make its
own evaluations.
Road to production
Even with the worsening oil prices, Tullow oil is still
aiming to produce, oil by end of 2016. The oil will initially be sold in the
local market. Kenya currently imports close to 100,000 barrels of oil a day to
satisfy domestic demand. Read
here for more information on oil activity in Kenya and Uganda.
