Africa Oil abandons dry wells in Kenya, Ethiopia

Canadian explorer Africa Oil has been forced to abandon drilling at one of its wells in Marsabit County and another in Ethiopia after failing to encounter any traces of oil or gas.

The Toronto Stock Exchange-listed firm said Monday that it is closing the Bahasi well, located within Kenya’s Block 9, which did not yield any oil or gas find after being drilled to a depth of 2,900 meters.

In Ethiopia, Africa Oil said it has also stopped drilling works at Tutule-1 well in the South Omo block after tests showed no oil or gas finds at a depth of 2,101 metres.

“While we are disappointed that the Bahasi and Tutule wells did not find commercial hydrocarbons, we look forward to aggressively pursuing other exploration opportunities in other sub-basins within these two large blocks,” said Keith Hill, chief executive of Africa Oil in a statement.

READ: Season of fresh mergers as Kenya confirms oil success

Mr Hill said the Kenyan well ‘is being plugged and abandoned’ and that the company will carry out further tests and analysis at the Ethiopian well ‘to determine the future exploration program direction in the North Turkana Basin.’

This becomes the oil and gas explorer’s first setback in Kenya where it has made five consecutive major oil discoveries in Lokichar Basin, Turkana County where it has operations with its partner Tullow Oil.

“South Lokichar Basin continues to be our main focus, but we are still confident we will unlock other productive basins on this trend,” said Mr Hill in the statement.

Africa Oil said tests at both Twiga South-1 and Ngamia-1 on Blocks 13T and 10BB in Kenya confirmed commercial viability of over 5,000 barrels of oil per day, doubling the company’s previous estimates.

In July, the firm announced a new major oil discovery at Etuko-1 in Block 10BB followed another oil find at Ekales-1 in September and struck black gold at Agete-1 in Block 13T in November this year.

The Vancouver-based firm announced that it will move to drill a fresh exploration well at Sala, located northeast of Block 9 where it is the operator and owns the block jointly with Marathon Oil (50 per cent).

READ: Australian firms to sell part of Kenya exploration rights

It will also shift focus to Shimela, within the South Omo block, to begin new drilling works in the first quarter of 2014. Africa Oil also plans to drill two exploration wells in the Chew Bahir basin, located to the east of the South Omo Block, in 2014.

Kenya has witnessed increased activity in its nascent upstream sector, fuelled by recent oil finds in Turkana.

A total of 44 out of Kenya’s 46 oil exploration blocks have been licensed to explorers though no commercial discoveries have been made to date.