British oil giants Tullow oil have extended their oil exploration interests in East Africa a north higher with the acquisition of a 50% stake in the East Africa Rift Basins of Kenya and Ethiopia from Canadian oil firm Africa Oil Corp.
Tullow Oil Kenya-and-Ethiopia-acquisitions map
The companies announced today in separate statements that they had agreed on the deal Where Tullow Oil plc gets 50% operated interest in six adjacent licenses covering the East African Rift Basins of Kenya and Ethiopia, an area of 97,000 sq km. The two companies are awaiting approval of the different regulators in Kenya and Ethiopia.
“We are delighted to be extending our acreage across the prospective East African Rift Basins of Kenya and Ethiopia. Rift Basins are a core play for Tullow and to date we have discovered and identified resources in excess of 2.5 billion barrels in the Lake Albert Rift Basin in Uganda We look forward to working with our new partners and applying our valuable technical insights to this under-explored frontier region of East Africa,” said Angus McCoss, Tullow’s Exploration Director
Tullow has signed agreements with Africa Oil Corp (“Africa Oil”) to gain a 50% interest in five licences; Blocks 10BB, 10A, 12A and 13T in Kenya and the South Omo Block in Ethiopia. This acquisition expands on the farm-in to Block 10BA from Centric Energy (“Centric”) announced in August.
Under the terms of the agreements with Africa Oil, Tullow will reimburse pro-rata past costs in each of these blocks estimated at $10million and will carry Africa Oil for future net expenditures up to US$23.75 million.
Tullow says while the East African Rift Basin acreage shares many geological attributes with Tullow’s Lake Albert Rift Basin position in Uganda however it is approximately ten times larger.
“The acreage, which is located 500 km to the east of Lake Albert has good evidence of a live oil system. The Loperot-1 well drilled in 1992 recovered 29 degree API waxy crude from Miocene sandstones. Seismic programmes are planned for the acreage in 2010 and 2011 and the first wells are expected to be drilled next year,” Tullow said in the statement
This is the second major oil fields purchase by Tullow who bought Heritage Oil and gas interests in the most productive Lake Albert Rift basin blocks in Uganda.
The East African Rift Basins purchase will give Tullow oil managers and shareholders more confidence in their oil exploration and production business, following ongoing controversy over the capital gains tax dispute between heritage oil and Uganda government, which has left Tullow with no license over the recently purchased fields.
Tullow Oil fact book
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Tullow in July released its mid year 2010 results indicating great improvement in its business performance resulting from its Africa oil exploration activities especially in Uganda, Ghana and now is set for major activities in East Africa Rift Basins.
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