Kenyan Ministry grants Lamu basin PSC extensions

The Kenyan Ministry of Energy has granted a six-month extension to the first additional period of production sharing contracts (PSCs) for blocks L8 and L9 located in the offshore Lamu basin, Kenya.

Offshore staff

SYDNEY, Australia -- The Kenyan Ministry of Energy has granted a six-month extension to the first additional period of production sharing contracts (PSCs) for blocks L8 and L9 located in the offshore Lamu basin, Kenya.

The two joint ventures, both comprising Origin Energy (Kenya) (75%), Pancontinental Oil and Gas NL (10%), and Afrex (15%), have to commit to enter the second additional period by January 21, 2009, for each block.

The second additional period requires the drilling of an exploration well in block L8 and the acquisition of 3D seismic in block L9 in the first year. Under an existing farm-in agreement, Origin Energy must fully fund the costs associated with this work.

The joint venture has matured the large Mbawa prospect to drillable status in block L8. From exploration studies completed, Origin estimates that this prospect could contain in excess of 1 Bbbl of recoverable oil in Tertiary/Cretaceous reservoirs. Seismic across the prospect is associated with a prominent direct hydrocarbon indicator (DHI) and there are hydrocarbon seeps on the sea surface above the structure. Potential Jurassic aged reservoir objectives are mapped in a larger, but faulted, structural closure below the Tertiary/Cretaceous trap, the company says.

According to Origin, the Mbawa structure remains an exploration prospect and will need to be drilled to establish the presence of hydrocarbons or otherwise.

08/07/2008

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