Tullow and Africa Oil Cautionary Steps in Kenya’s Oil DiscoveryMay 9 | Posted by David Goldman | Energy Intelligence, Intelligence News
Kenya is inching closer to become a world oil producer yet the president of the republic urges caution in the way both industry experts, media analysts, and specifically the oil explorers, British Tullow Oil, and Africa Oil, announce the progress.
According to President Kibaki the announcement that there has been oil finds in Kenya is a beginning of a long journey to make the country an oil producer.
This need for caution is not rhetoric rather specific and quite impartial in its meaning owing to the presidents great wisdom and capacity in socio-economics.
Ngamia-1 is within range of Loperot an area once drilled by Amaco and oil was found though the commercial viability was neither confirmed nor announced.
The President maybe worried the mystery shrouding previous exploratory efforts and finds might come into play and have negative ramifications.
Secondly, British Tullow used Chinese technology to establish presence of oil in the Ngamia 1 well in Turkana giving China a shot in the arm and possibly a distant shareholder.
These twists and connections in how deals come into play that create a negative public policy that can produce a negative socio-economic effect forcing an economy to crumble.
However if the oil found in Kenya is commercially viable, it will be Kibaki’s greatest moment since more investments will spiral and accelerate economic growth.
Kibaki hopes to see the oil discovery help create as many jobs as possible for those with the relevant qualifications, particularly the youth.
However, it is the timing of the new oil find in Ngamia-1 announcement that proves suspect these finds quite ulterior.
According to economic intelligence findings, Tullow Oil is a FTSE 100 company and that considerable uncertainty still surrounds the commerciality of the Ngamia oil accumulation.
The new announcement was so timely that is saved Tullow from a FTSE 100 fall besides helping Africa Oil shares massively gain in the last day of trading.
This begs the question, ‘Is Africa Oil being used to make money or are the announcements real?’
According to Tullow Oil, in March a find of a limited oil reservoir of 20m of oil-bearing rock at the Ngamia-1 test well at shallower depths has been credited with a new and significantly promising find in early May.
This is very promising and by the time the well is drilled to 2700 meters, it will be authentic that Kenya will be an oil producer in 3-4 years time.