TURKANA, Kenya, Apr 6 – Kenyans may have to wait a bit longer to know if there is commercial viability in the oil deposits discovered at Ngamia 1 in Turkana.
“It takes a number of factors so it could take a bit longer to determine commerciality. It may be a matter of months or sometimes years,” Tullow Oil country manager Martin Mbogo told journalists on Thursday during a media tour of the tightly guarded oil well on the outskirts of Lokichar town.
He said the process of running analytical data and determining the commercial value of oil deposits is always complex and cannot be hurried.
“Oil exploration is a capital and time intensive activity and also given the vast array of stakeholders involved, it could take in excess of three years to determine the commerciality of Ngamia-1,” the company said.
News of the oil discovery in Turkana was broken to Kenyans last month by President Mwai Kibaki when Tullow Oil encountered in excess of 20 meters of net oil pay – which is the net thickness of an oil reservoir which may be capable of producing hydrocarbons – at Block 10BB.
Engineers drilling the oil well have so far hit a depth of 1500 meters and are working round the clock to hit their target of 2,700 meters in the next 35 days.
The Tullow Oil boss told journalists that they will have completed drilling the well by the end of this month so that they start running the mandatory tests which have shown impressive signs so far.
“From a Tullow perspective, there is optimism around and any celebration as yet are in order but let us wait until we get to the desired depth of the well so that we see if we can pop more champagne,” he said. “Certainly, in Tullow we are very encouraged, this is probably the closest Kenya has come in oil exploration, because getting this sort of result from the first well, it is really impressing.”
Samples from the well are sent to London weekly for regular tests to ensure everything is on course. Well testing involves flowing the well in order to assess the potential productivity of the well and of the reservoir.
“After the actual drilling to the depth of 2,700, there is analytical data that need to be evaluated and therefore be able to determine if there is commerciality, it takes a number of factors,” he said. “Commerciality is a factor of many things depending on how big the structure is and the flow properties, so it may be months or sometimes years before you determine if you actually have a commercial well.”
Multiple interviews with engineers on site however, revealed that there are “significant results” seen as they move down the ground.
“As we move down, tests are done weekly and they have shown good results, we are very optimistic,” Dave Sloan, one of Tullow Oil company’s engineers said, adding “the process is too complex.”
The oil firm’s country manager announced that they are already moving equipment to Marsabit to embark on another well drilling exercise at Block 10A where the Paipai-1 well is located.
“What we have is very encouraging and it puts us in a position where we would like to drill other prospects at some future point. After Ngamia 1, the plan is to proceed to Marsabit County. We have prepared a well pad so as soon as we complete on this, our commitment is to get to Marsabit,” he said.
Tullow Oil Kenya operates six licenses in the country – including Block 10A, Block 10BA, Block 10BB, Block 13T, Block 12A and Block12B.
“These are spread across Marsabit, Baringo, Turkana and Kisumu counties. Tullow Oil is also a partner in Kenya Block L8 offshore Malindi County,” the company External Affairs advisor Anne Kabugi said.
Tullow estimates that it will have spent in excess of between $30 million to $40 million by the time it completes drilling the Ngamia 1 well later this month.
Some of the challenges the company has faced include poor road network used to transport heavy machinery, including sensitive equipment.
“One of the big challenges is infrastructure. We have moved close to 300 trucks, we move very sensitive equipment and there is also the challenge of skilled manpower. But we have been successful,” the Mbogo said.
Asked to comment on claims by local leaders that the company was not doing enough to cater for the interests of the local community, he said “we have done a lot here, we have many levels of engagement, we are supporting children going to school and we are getting them water. It is the best thing to do in business.”
The company said it invested over Sh30 million in the provision of education, health and water projects and initiatives in 2011 alone.
It intends to scale up this community investment this year to also offer five public scholarships in the fields of Drilling and Well Engineering, Reservoir Evaluation and Management, Energy Studies specializing in Oil and Gas Economics, Environmental Science and Oil Gas Law.
Mbogo said politics will not affect Tullow’s work because “we are a contractor for the government.”
“We feel encouraged. We have an obligation to fulfill… we work very closely with the Ministry (of Energy) and we work closely with local leaders. With the foundation laid, we will take this project to completion to the benefit of all,” Mbogo said.
Tullow Oil’s Regional External Affairs Manager for South and East Africa Trina Fahey told Capital FM News there are approximately 210 personnel working on site at Ngamia 1. “Of these, approximately 80 percent are Kenyan nationals while the rest are foreigners with specialised skills.”
Since commencing operations in Kenya in late 2010, Kabugi said, Tullow Oil Kenya has also undertaken the world’s largest Full Tensor Gradiometry (FTG) survey across its acreage.
“This is used by oil, gas and mining companies to measure the density of the subsurface, effectively the rate of change of rock properties,” Kabugi said.
It is possible to build a picture of subsurface anomalies which can then be used to more accurately target oil deposits.
In Africa, Tullow has productions in Ghana, Gabon, Cote d’Ivoire, Mauritania, Congo (Brazzaville) and Equatorial Guinea with two large appraisal and development programmes in Ghana and Uganda.
It has drilled 46 oil wells in Uganda since 2006, with 43 successes, according to the firm’s Regional External Affairs Manager for South and East Africa.