US-based Nigerian Firm Wins Kenyan Oil Blocks

US publicly listed oil exploration and development company, CAMAC Energy, has won three new oil exploration blocks in Kenya. The deal further enlarges the company’s operations in Africa.

Confirming this yesterday, Chairman/CEO of CAMAC, Dr. Kase Lawal, said an agreement has already been reached between the Kenyan government and CAMAC on award of three new oil blocks in the East African country, and that their leases are expected to be issued soon.

Earlier, a press statement issued in New York, disclosed that the US-based energy company “has entered into an agreement with the Kenyan Ministry of Energy for the award of three exploration blocks: l1A L1B, and L16 (the Blocks).”

Industry sources explain that inking “heads of agreement” deal is the last stage in the licensing process, and that once such an agreement was signed, the formal licenses would be issued.

Specifically, the heads of agreement has set forth “the negotiated major fiscal terms and work programme for the blocks while the award is subjected to negotiation and signing of formal Production Sharing Contracts (PSCs) for the blocks within the next 30 days and approval by the Kenyan Minister of Energy and the Board of Directors of CAMAC Energy as well as payment of requisite signature bonuses upon signing.”

In his comment, Lawal said: “We are exceptionally pleased to have the opportunity to be awarded three exploration blocks in Kenya. Not only is Kenya home to some of East Africa’s most prospective basins, the blocks are close to those owned by Tullow Oil Plc, Apache and Ophir.

“With this agreement, CAMAC Energy will enter East Africa on its preferred terms as operator with the ability to control the pace of exploration. As with our previous announcement concerning The Gambia, we will continue to validate our strategy of acquiring prime frontier exploration acreage throughout the continent.”

According to the deal, CAMAC Energy will be the operator of the three blocks with 90 per cent controlling interest. Kenyan government will hold the remaining 10 per cent through declaration of commerciality.

The CAMAC blocks in Kenya are Block 11A, an onshore block covering 10,913 square kilometers in northwest Kenya near the Ugandan border and Block L1B, which is an onshore block covering 12,197 square kilometers in eastern Kenya on the Somali border. It also owns Block L16, which covers 1,699 square kilometers onshore and 89 square kilometers offshore on Kenya’s southeast coast.

One of them — Block 11A — is in the Lotikipi rift basin, close to four blocks operated by Tullow, which is explores Blocks 10A, 10BA, 10BB and 13T.