Status of Oil & Gas Exploration in Kenya Dr. Peter K. Thuo, PhD E&P Team Leader National Oil Corporation of Kenya

Kenya at a Glance Social: Government type: Democratic Rep. (Coalition Government) Size: 582,646 sq. km Religion: Christian 78%, Muslim10% others 12% Capital City: Nairobi Main seaport: Mombasa National language: Kiswahili Official language: English Economic: Population: 38.3 million (2008) Currency: (KSh.) GDP Growth Rate: 7.1% (2007); 1.7% (2008) Major GDP earners: Tourism, tea, horticulture, Coffee

Kenya Sedimentary Basins Area Km2 Wells Drilled Approx. Sediment thickness Lamu 132,770 17 12,000m Mandera 51,920 2 10,000m Anza 94,220 11 Tertiary Rift 38,904 4,000m Total wells drilled 32

Geophysical Database Existing Data 2D Seismic: 73,389 km 3D seismic: 820 sq km Aeromag: >268,000 km Gravity : >12,313 km Data Digitization Project ongoing

Acreage Status BLOCK LEASE STATUS: CNOOC 2 Blocks (9, L2) Origin Energy 1 Block (L8) Flow Energy 1 Block (L6) Camec Kenya 1 Block (11) Africa Oil Corp. 2 Blocks (10A,10BB) Vangold Resources 2 Blocks (3A, 3B) EAX 2 Blocks (1, L17/18) Lion Petroleum 1 Block (2B) Sohi Gas Lamu 1 Block (L4) Sohi Gas Dodori 1 Block (L13) Platform Resources 2 Blocks (12A, 13T) Anadarko Petroleum 5 Blocks (L5, L7, L11A, L11B, L12) Centric Energy 1 Block 10BA Total No. of Blocks Leased 22, Total No. of Operating Companies 13

Oil & Gas Shows Well Year Operator TD Result Pandangua-1 1960 BP-Shell Upper Eocene DST 12.7MSCF/D (C1-C2) Dodori-1 1964 Palaeocene DST 3.1MSCF/D (C1-C5) Pate-1 1971 Eocene Kick, flowed wet gas (C1-C4) Kipini-1 Campanian-Maastrichtian Wet gas shows (C1-C5) Simba-1 1978 Total Campanian Dry Maridadi-1 1982 Cities Services Middle Eocene Oil & gas (C1-C5) shows Kofia-1 1985 Union Oil Maastrichtian Oil & Gas (C1-nC4) shows

Block L8 (Origin Energy) Acquisition of 900 sq km of the first ever 3D in Kenya completed in Dec. 2009 Data being interpreted to identify a drilling location

Block L17/L18 (EAX) Acquisition of 410 km shallow water -transition zone 2D seismics currently underway Specially-adapted boat to acquire data in as shallow as 2m water depths Part of the Lamu Basin with high potential for oil and gas (Pemba island oil seeps just to the south and Tanzania Songo Songo Gas field further south)

Blocks L4 & L13 (SOHI) Seismic acquisition planned for later part of 2010 Pate-1 well in Block L-4 kicked gas thus blocks have huge potential for gas discovery

Lamu Deep Offshore (Anadarko Petroleum) Acquisition of 5000 km of 2D seismic data to commence in April 2010 Lamu continental margin wells have encountered oil shows Anadarko hopes to undo the negative publicity resulting from the Pomboo well drilled by Woodside

Block 1 (EAX) Block in Mandera Basin which has the only known oil seep in Kenya (Tarbaj oil seep) Mandera Basin is an extension of Ogaden Basin in Ethiopia (with Calub & Hilala Gas discoveries being developed by Petronas) 1276 km of 2D seismics to commence in Q2 2010

Block 9 (CNOOC) Drilling Bogal-1-1 Well by CNOOC recently terminated at depth of 5054m Well logging and evaluation currently ongoing Anza Basin comparable to the South Sudan Rifts with proven production

Block 10A (Africa Oil Corp.) Acquisition of 750 km onshore 2D Seismics to commence Q3 2010 Block in Anza Basin, has 3 wells drilled, one well had significant oil shows Anza Basin is the southern termination of the Central African Rif System CARS, associated with major oil fields

Block 10BB (Africa Oil Corp.) Acquisition of 600 km of 2D seismic to commence in may 2010 Block is in Tertiary Rift Basin, comparable to the Albertine Basin in Uganda (recent discoveries) Loperot-1 well in the block encountered very significant oil shows with minor amounts recovered by DST

Petroleum (Exploration & Production) Act, 1986 The Petroleum Act provides legal framework and regulates the negotiation of Production Sharing Contracts (PSC) with oil companies. The PSC’s are subject to negotiations and are governed by: The Petroleum Act, Cap 308, 1986 The petroleum (expl. & Prod.) Regulations The income tax (amendments) Act Environmental management & Coordination Act 2000 – NEMA Work programme - Negotiable Exploration Period - Negotiable, (typically 3,2,2) Acreage surrender - Negotiable, (typically 25%) Surface fees - Negotiable, (typically 3, 5, 8 USD/sq Km) Training fees - Negotiable Dev. & Prod. Period - Negotiable (typically 25 years) Govt participation - Negotiable (typically 15%)

Thank you and welcome to Kenya