Wednesday, October 31, 2012

Tullow Shares Rise After News Of Second Oil Find In Kenya


Visitors tour the oil rig at Ngamia 1 in Turkana where Tullow discovered oil. The firm said in a statement on Wednesday that drilling is on-going and an “announcement of the drilling result is expected in early to mid-November after target depth has been achieved and necessary sampling and analysis has been completed.” Photo/FILE Nation Media Group

*Mwendia Nyaga, another analyst, said Kenya is headed for rapid growth in the upstream oil and gas sector and should get ready to embrace the success and the potential advantages that it will present. “This is exciting news for Kenya. Any investment in the right infrastructure is justified,” added Mr Nyaga on telephone.

*The Twiga South-1 structure is the second prospect to be tested as part of a multi-well drilling campaign in Kenya and Ethiopia.

*It is the first discovery in block 13T following the Ngamia-1 discovery early this year in Block 10BB.Twiga-1, on Block 13T, is about 30 kilometres west of Ngamia-1.

British explorer Tullow Oil’s discovery of oil in a second Kenyan well pushed the firm’s shares among the top gainers on the FTSE 100 index.

Tullow Oil’s shares rose by 3.7 per cent outperforming the index which grew by 0.3 per cent while the shares of Africa Oil, Tullow’s 50 per cent partner in the Twiga South-1 well also jumped by a similar margin at the Canadian Stock Exchange.

The gains came as Tullow Oil confirmed an exclusive report in Wednesday’s edition of the Business Daily that it had discovered oil at the well, six months after another at the Ngamia-1 well in Turkana. See: Tullow strikes oil in second Northern Kenya operation

“Tullow Oil Plc announces that the Twiga South-1 exploration well in onshore Kenya Block 13T has successfully encountered oil. An announcement of the drilling result is expected in early to mid-November after target depth has been achieved and necessary sampling and analysis has been completed,” the company said in a statement.

Kenya energy officials greeted the news with hope that the discovery, indicated as 30 metres of net pay (depth) by sources, would move the country towards possible commercial production.

“They have discovered some quantities of oil but whose net pay is yet to be assessed. This is significant development for our country,” said Energy permanent secretary Patrick Nyoike.

“This is encouraging progress towards commercial oil confirmation , especially if Twiga-1 ends up being as prolific as Ngamia-1,” said Mr George Wachira, an industry consultant.

Mwendia Nyaga, another analyst, said Kenya is headed for rapid growth in the upstream oil and gas sector and should get ready to embrace the success and the potential advantages that it will present. “This is exciting news for Kenya. Any investment in the right infrastructure is justified,” added Mr Nyaga on telephone.

The Twiga South-1 structure is the second prospect to be tested as part of a multi-well drilling campaign in Kenya and Ethiopia.

It is the first discovery in block 13T following the Ngamia-1 discovery early this year in Block 10BB.Twiga-1, on Block 13T, is about 30 kilometres west of Ngamia-1.

It is understood the oil was encountered at 2,337m against a target depth of 3,114m.

Tullow struck substantial deposits of between 104 metres and 143 metres of net pay at Ngamia-1 at a total depth of 2,340 meters, the largest ever discovery in a single well by Tullow oil in Africa.

......Zeddy Sambu/Business Daily Africa
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