Bloomberg News

Afren Doubles East Africa Resource Scope, Gets Partner Interest

August 21, 2012

Afren Plc (AFR), a U.K.-based oil and gas company focused on Nigeria and Iraq, more than doubled its East African resource estimate to 5.8 billion barrels of oil equivalent after new analysis and seismic examinations.

The company plans to drill exploration wells in Kenya, Ethiopia, Tanzania and Madagascar in the next 18 months.

In Kenya’s Blocks L17 and L18, the resources estimate was raised to 1.1 billion barrels from 94 million barrels, while the company is carrying out “3D seismic offshore” exploration works, Chief Executive Officer Osman Shahenshah said.

Marathon Oil Corp. is the latest entrant into East African exploration, while Total SA, Eni Spa, Tullow Oil Plc are among those expanding operations in the region. Shahenshah in March forecast more explorers would secure fields in East Africa following the first onshore crude oil discovery in Kenya.

“From time to time companies approach us indicating interest to participate with us in some fields,” he said in an interview. “There is more and more interest in East Africa.”

The company more than tripled output to a daily net 41,251 barrels of oil equivalent in the first half from last year. Sales rose almost fivefold to $771.7 million because of the higher output, London-based Afren said today in a statement.

While second-quarter production was curbed by maintenance, Shahenshah reiterated full-year guidance of 42,000 to 46,000 barrels a day. Afren has begun output at the Barda Rash field in Iraqi Kurdistan, with the first well yielding more than 6,000 barrels oil a day. Output will rise to as much as 15,000 barrels with wells brought on stream by the year-end, Shahenshah said.

The company plans to produce 35,000 barrels a day in Kurdistan next year, with extraction expected to rise to 125,000 barrels of oil a day in 2017. “That’s what we call the base case, there is obviously upside from there,” the CEO said.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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