Kenya strikes oil for first time
Kenya announced its first oil discovery on Monday, saying it was found in the northern part of the country where Africa-focused British firm Tullow Oil Plc has been exploring for oil, and was now checking on the commercial viability of the find.
President Mwai Kibaki said in a statement read on live television that Tullow had encountered in excess of 20 metres of net oil pay, and would drill more wells in the area to ascertain the commercial viability of the find.
"This is the first time Kenya has made such a discovery and it is very good news," Kibaki said. "It is, however, the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years." Shares in Tullow jumped 2.5% in London immediately after the announcement of its oil find in Kenya.
Kenya and its neighbours in east Africa as well as the Horn of the continent have become a hot spot for oil and gas exploration in recent years, spurred by new finds.
South Sudan, which split from Sudan in July under a 2005 peace deal that ended decades of civil war, is an oil producer, while commercial oil deposits were found in Uganda, and there are vast natural gas deposits in Tanzania and Mozambique.
At a joint news conference with Tullow executives, Kenya's energy minister Kiraitu Murungi displayed a glass bottle of the "light, waxy crude oil" found by the company.
"We will make sure that the oil in Kenya is a blessing for the people of Kenya and not a curse," Murungi said, in reference to other countries whose people remain mired in poverty despite having struck oil.
Analysts said although it was still too soon to tell the significance of Tullow's discovery, with the exact quantity or deposits as yet unknown, it was worth noting that Tullow had stated the find went beyond their expectations. "This is likely to attract interest from other explorers in the coming months, keen to take advantage of this early find," London-based Marc Mercer, Africa associate at the Eurasia Group, a political risk consultancy, said.
"If considerable reserves are found along the quantity discovered in Uganda, then this is somewhat of a game changer for Kenya and they are well placed to develop the industry for export given their geographic location."