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Marathon Oil enters Kenya

  |   July 24, 2012 at 8:06 AM
HOUSTON, July 24 (UPI) -- Marathon Oil Corp. said it acquired a stake in two exploration blocks in northwestern Kenya in a deal with Africa Oil Corp. worth an initial $35 million.

Marathon Oil, which has headquarters in Houston, takes on an interest in two exploration blocks that cover more than 11 million gross acres in northwestern Kenya.

"With this transaction Marathon Oil gains entry into an emerging onshore oil play in Kenya that offers potential across a vast acreage position and fits with our liquids-rich strategic focus," Annell Bay, Marathon Oil's vice president of global exploration, said in a statement.

Exploration work could begin as early as the third quarter of this year.

Africa Oil serves as the operator during the exploration phase, though Marathon could take on that role if a commercial discovery is made in the region.

Marathon makes an initial payment of $35 million and further agreed to fund Africa Oil's future joint venture expenses up to a maximum of $43.5 million during the next three years.

Africa Oil Chief Executive Officer Keith Hill, said he was pleased to work with Marathon in Kenya, adding the region is set to become a major oil and natural gas producer.

Africa Oil made similar deals in Kenya with Tullow Oil.

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