NAIROBI (AFP) — The Kenyan government has signed a contract with a Swedish firm to look for oil and natural gas in the country's northwestern Lake Turkana basin, an official statement said Saturday.
Under the deal inked Friday, Lundin Petroleum of Sweden will explore oil deposits in the lake's Anza Basin for the next four years, state-run Kenya Broadcasting Corporation quoted Energy Minister Kiraitu Murungi as saying.
The basin, covering an area of some 14,748 square kilometers, is an extension of the prolific Muglad Basin of Sudan, which has recoverable reserves of at least 300 million barrels of oil.
Murungi said Kenya's northwestern area is likely to have oil deposits after the discovery of oil and gas in neighbouring southern Sudan and along the Uganda-Democratic Republic of Congo border.
Lundin Petroleum chief executive Ashley Heppenstall said oil exploration carried out in the 1980s in northeastern region yielded indicators of possible oil or gas deposits.
"With the addition of this exciting block, Lundin Petroleum continues to expand our strategic exploration position in East Africa, which to date, includes blocks in Sudan, Ethiopia, and Kenya," Heppenstall explained in a statement seen by AFP.
"Past exploration efforts dating back to the late 1980s have proven the existence of excellent quality, oil-prone source rocks, oil-saturated sandstone reservoirs, and a multitude of structural traps which remain undrilled," the statement added.
Under the agreement, Lundin Petroleum will be the sole operator under the Block 10A Production Sharing Contract (PSC), with the Kenyan government having an option to participate with up to a 13 percent interest in case of a discovery.
Lundin Petroleum, listed in the Nordic exchange, is an independent oil and gas exploration and production firm, operating in Europe, Africa, Russia and the Far East.
Nearby to the Lundin exploration block, energy giant Royal Dutch Shell said in the mid-1980s there were signs of oil deposits in Erie Springs on the shores of Lake Turkana.
And a geological research by Kenya's energy ministry showed a sufficient amount of petroleum source material -- organic carbon rocks, reservoir rocks and trap rocks -- for there to be oil in the Turkana region.
Although Royal Dutch Shell abandoned the effort after running out of funds in 1992, Kenyan authorities continued to believe the prospects for finding oil in the region were good.
Last year, the state-run China National Offshore Oil Corporation (CNOOC) signed an agreement to look for oil in the country's Indian Ocean waters, covering six blocks covering 115,343 square kilometers (44,534 square miles).
Kenya currently imports most of its oil from Sudan, whose fielding were said to fuel the country's two decade civil that ended in 2005.
In September 2003, the Australian oil and gas firm Woodside Energy began a five-million-dollar exploration project on its assigned block off Kenya's Indian Ocean coast after experts said there were "massive prospects" under those waters.
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