BG Group to Spend $160m on Oil Wells

The firm expects to move a rig from Tanzania and sink two wells in exploration area L10A and L10B near Mombasa in January 2014. Drilling of the two wells is expected to take about six months.

UK oil explorer BG Group will next year spend Ksh13.9 billion ($160 million) to drill two offshore wells for crude oil and natural gas in Kenya, its executives said.

The London Stock Exchange-listed firm expects to move a rig from Tanzania and sink two wells in exploration area L10A and L10B near Mombasa in January 2014. Drilling of the two wells is expected to take about six months.

“The current plan is to relocate Deepsea Metro-1 drillship from Tanzania to Kenya in the first quarter of 2014,” said BG’s external communications manager Mark Todd.

The first well will be in shallow waters with depths of 500 to 700 metres at least 20 kilometres from shore. The second well will be in the deep sea at depths of 1,000 to 1,600 metres over 110 kilometres from shore.

Drilling activity is expected to intensify in the final quarter of this year and early next year with brightening prospects of oil and gas.

On September 3, Africa Oil — a Canadian company prospecting for petroleum in northern Kenya — raised five-fold the estimated deposits in the Lokichar basin, affirming a recent report by British exploration firm Tullow Oil.

In a released statement, Africa Oil said that northern Kenya has commercially viable oil and gas reserves. The firm is an exploration partnership with Tullow Oil in some of the wells with fuel deposits in northern Kenya.

Mr Todd said BG Group believes Kenya has the potential to discover either crude oil or natural gas in acreage L10A and L10B as various companies have discovered fossil fuel deposits in other exploration areas in the country.

BG owns 40 per cent of acreage L10A and 45 per cent of acreage L10B.

– The East African