Tullow Oil says the Cheptuket-1 exploration well in the Kerio Valley Basin has a structural setting that is similar to the successful Ngamia and Amosing discoveries in the South Lokichar Basin. (Source: Tullow Oil)
A potential basin-opening oil discovery has been made by the Tullow Oil-operated Cheptuket-1 well in northern Kenya.
The U.K.-based company said the well, the first to test the Kerio Valley Basin, encountered strong oil shows in cuttings and rotary sidewall cores across 700 m in Block 12A. The findings indicate a petroleum system with “significant oil generation” could be present, Tullow said.
“This is the most significant well result to date in Kenya outside the South Lokichar Basin,” Angus McCoss, exploration director for Tullow Oil, said in a statement March 16. “Encountering strong oil shows across such a large interval is very encouraging indeed.”
If early indications are true and post-well analysis, which is underway, are favorable, the basin could become the second that Tullow and its partner Africa Oil open in the country. It would follow exploration success in the South Lokichar Basin, where Tullow said the Etom-2 well in northern Kenya hit 102 mof net oil pay in December.
South Lokichar is believed to hold an estimated 600 million barrels of recoverable resources, according to Tullow. New 3-D seismic data, which Tullow said located the Etom-2, pointed to “significant remaining exploration prospectivity in the greater Etom area” and “supports an upside potential of 1 billion barrels of oil in the South Lokichar Basin.”
Drilled to a depth of 3,083 m by the PR Marriott Rig-46, the same rig that drilled Etom-2, Cheptuket-1 targeted the southwestern section of the Kerio Valley Basin. Post-well analysis will now determine how the exploration program in the basin takes shape as the Africa- and Atlantic Margin-focused independent continues exploring frontier areas across East Africa’s rift basins.
“I am delighted by this wildcat well result and the team is already working on our follow-up exploration plans for the Kerio Valley Basin,” McCoss said.
The wildcat discovery comes as the oil and gas industry copes with continued low commodity prices and many slow exploration activity. Market conditions could prolong the slowed pace of development in frontier areas as companies seek further cost cuts. Tullow and Kenya, which does not have any commercial oil production despite discoveries in recent years, are no exception.
In January, Tullow completed its deal with Delonex Energy to farm down 25% of its 65% operated working interest in Block 12A for a carry. Tullow remains the operator with 40% interest; Delonex, 40% and Africa Oil, 20%.
Most of Tullow’s activities in Kenya have been focused on finishing appraisal work for the South Lokichar Basin discoveries, where nine appraisal wells were drilled and five extended well tests were completed in 2015, Tullow said in its full-year results released Feb. 10.
“Good progress continues to be made on development planning in Kenya,” said Tullow, which is also developing discoveries in nearby Uganda’s Lake Albert Rift Basin. “A draft field development plan was submitted to the government of Kenya in December and will inform discussions as we progress toward potential FID of both the Kenya and Uganda upstream development projects and preparation for FEED is under way in both countries.”
The latest discovery further de-risks exploration in the area.
Equities analysts at Barclays said the result “vindicates” the company’s focus on the region over the last two years, according to a U.K. news report in The Telegraph.
The rig will now be demobilized, marking the end of the current drilling campaign.
Velda Addison can be reached at vaddison@hartenergy.com.
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