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Tullow Oil plans more drilling in Kenya

Company behind plans to build a crude oil pipeline from Kenya to the coast.

By Daniel J. Graeber
Tullow Oil said it plans more drilling in northern Kenya after a recent discovery of oil. Photo courtesy of Tullow Oil.
Tullow Oil said it plans more drilling in northern Kenya after a recent discovery of oil. Photo courtesy of Tullow Oil.

LONDON, Jan. 17 (UPI) -- Africa-focused Tullow Oil said it plans more drilling after it made an oil discovery inland Kenya that's likely tied into existing hydrocarbon finds.

The company said it ran through a column of oil measuring a net 80 feet thick at its Erut-1 well in the northern part of Kenya. Tullow said that early data show the discovery extends the known limits of another discovery nearby, Etom.

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"Further exploration drilling of this area is now being planned," Angus McCoss, an exploration director for Tullow, said in a statement.

Tullow found good samples of oil in the cores taken from a well in the so-called Cheptuket-1 well in the Kerio Valley basin in northern Kenya last year. Dubbed a wildcat well, or a frontier area not previously known to contain oil, the company said it was its most significant find yet in the region.

The company in late 2014 came up empty-handed while drilling into similar frontier basins in northern Kenya, despite early optimism. Nevertheless, Tullow said Kenya remains one of the bright spots in its portfolio, with an estimated 750 million barrels of oil equivalents in recoverable reserves.

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Kenya aims to build a crude oil pipeline to the coast with the help of Tullow Oil and its partners, Africa Oil and Maersk Oil. Studies on engineering and development of that pipeline are expected at some point during the first half of the year.

The company last year was plagued by equipment and legal issues at some of its prime holdings in Africa. The compounding strains of lower crude oil prices in 2016 forced the company to cut its spending plans, though in October it secured $345 million from lenders to help cover some of its debt, support it said would clear up some space for refinancing in 2017.

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