Over the weekend, British oil company Tullow Oil Plc (LON: TLW) struck oil in northern Kenya, the first time this has happened in the East African nation.
Though neighbors Uganda and South Sudan are already oil producers, Kenya never before had this opportunity.
But Tullow began exploratory drilling in East Africa, including this Ngamia-1 well in Kenya’s Turkana County, and after drilling 1,041 meters (3,415 feet), they found 20 meters (65 feet) of oil.
Kenyan President Mwai Kibaki gave a televised speech on Monday, saying:
“This is the first time Kenya has made such a discovery and it is very good news. It is, however, the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years.”
And the commercial viability of the oil is also still uncertain, he added. Tullow has planned more wells in the surrounding area and as far as Ethiopia in order to determine viability.
Tullow described the consistency of the oil, expressing a faith in the ordeal:
“The oil has similar properties to the light waxy crude discovered in Uganda. Following this discovery the outlook for further success has been significantly improved.”
Tullow will continue to drill to 2,700 meters (8,858 feet) in the Ngamia-1 well.
The company expects to find up to 300 million barrels of oil in the stretch between Kenya and Ethiopia.
Angus McCoss, exploration director of Tullow, said that the discovery was a sign of things to come:
“This is an excellent start to our major exploration campaign in the East African rift basins of Kenya and Ethiopia. To make a good oil discovery in our first well is beyond our expectations and bodes well for the material program ahead of us.”
Canadian company Africa Oil Corp. (CVE: AOI) is partnered with Tullow on the project.
Tullow was up 3% in Monday afternoon trading. Africa Oil Corp. was up 39.57%.
That’s all for now,