Canada's Simba Energy to drill for oil in Kenya in 2013

Wed Oct 3, 2012 9:50am EDT
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By Kelly Gilblom

NAIROBI (Reuters) - Pan-African oil & gas explorer Simba Energy (SMB.V: Quote) is to drill its first well in northeast Kenya in 2013, a company executive said on Wednesday, the latest effort by an energy firm to find oil in the east African nation.

The Canada-based explorer recently completed a passive seismic survey and believes there are at least one billion barrels of oil in the Kenyan block.

"Our focus is to drill. How fast can we drill ... I'd like to do it as soon as possible," Hassan Hassan, Simba managing director of operations, told reporters at the opening of its new office in Nairobi.

Interest in Kenyan exploration reached fever pitch this year after UK-based Tullow Oil (TLW.L: Quote) discovered crude in the country's northwest Turkana region and over the next six months the company is due to drill its first well in Ethiopia.

Tullow's Ethiopian venture partner Agriterra (AGTAR.L: Quote) on Wednesday announced it was selling its 20 percent stake in the exploration block to Marathon Oil (MRO.N: Quote) for $40 million cash, with a further $10 million if a discovery is made.

Over the past few months neighboring Tanzania and Uganda increased their oil and gas reserve estimates, underlining the region's potential to become a future energy hub.

Simba said it had started the farm-out process so it could find a venture partner to help fund exploration costs in Kenya, which can run as high as $50 million for onshore wells.

Hassan said he would prefer a major oil and gas company as a partner.   Continued...