Jan. 9 (Bloomberg) -- Kenya plans to demarcate eight new deep offshore oil exploration blocks by next month, and signed an interim production sharing agreement with Total SA to operate at least one of the areas, an energy ministry official said.
Gas finds off Tanzania and Mozambique have generated enough investor interest to justify nearby Kenya carving out additional territory for exploration, Martin Heya, the Energy Ministry’s petroleum commissioner, said in an interview today in Nairobi.
Petroleo Brasileiro SA, Brazil’s state-run oil company, and Houston-based Apache Corp. are also discussing the possibility of investing in some of the new exploration acreage, Heya said.
“Once companies showed interest, with recent discoveries in the region, we had good reason to create new blocks,” he said. “We want those companies with a lot of muscle because these are very deep waters and that takes financial and technical abilities.”
Plans to delineate the blocs L21 through L28 off the coast of Kenya, with water depths between 3,000 meters (1.9 miles) to 4,000 meters, are being completed and the details will appear in a notice in the government gazette by February, Heya said.
Frequent power outages in East Africa’s largest economy are viewed as a major obstacle to faster economic growth. The country, which has no proven reserves, is trying to expand energy sources including natural gas and renewable power to meet an estimated 13.5 percent annual increase in electricity demand.
Exploration companies are increasingly investing in Kenya as neighboring Uganda, with an estimated 2.5 billion barrels of oil reserves, gears up to become an oil producer, in a venture between Tullow Oil Plc, Total and China National Offshore Oil Corp. Production is expected to begin once the government approves partnership and field development plans.
In Kenya, Tullow, the London-based explorer with the most licenses in Africa, plans to drill a test well this month, immediately followed by a second one in the country’s northwest, Heya said. In addition to the preliminary agreement for block L22, France’s Total also has a 40 percent stake in five of Kenya’s Lamu Basin zones operated by Anadarko Petroleum Corp.
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