Qatar joins the race of firms eyeing a piece of Kenya’s 'light and sweet' crude oil and buys three offshore exploration blocks ahead of major crude production in 2022

Crude oil
  • Qatar Petroleum, a State-owned company of the energy-rich Arab nation, has acquired three offshore exploration blocks in the Lamu Basin.
  • The three offshore blocks are situated in what is considered to be a frontier and largely unexplored area in the Lamu Basin.
  • Kenya has about 63 gazetted oil blocks, 27 of which have been assigned to 15 oil companies for prospecting including the State-owned National Oil Corporation of Kenya (NOCK).

Energy-rich Arab nation of Qatar is eyeing a piece of Kenya’s ‘light and sweet’ crude oil ahead of a major crude production in 2022.

Qatar Petroleum, a State-owned company of the energy-rich Arab nation, has acquired three offshore exploration blocks in the Lamu Basin, joining a growing list of global corporations seeking to exploit the huge fuel and gas deposits believed to be underneath the Indian Ocean seabed.

In a statement on Wednesday, the company said it had signed an agreement with French multinational oil and gas company Total and its Italian peer Eni to take over three offshore exploration blocks in the Lamu Basin.

“We are pleased to sign this agreement to participate in exploring these frontier offshore areas in Kenya and to further strengthen our presence in Africa,” said Qatar’s Minister of State for Energy Affairs Saad bin Sherida al-Kaabi, who is also the chief executive of Qatar Petroleum in a statement.

In the deal that is subject to regulatory approvals by Kenyan authorities, Qatar Petroleum said it had acquired a 25 percent stake (13.75 percent from Eni and 11.25 percent from Total) in three blocks located in the offshore Lamu Basin.

The three offshore blocks are situated in what is considered to be a frontier and largely unexplored area in the Lamu Basin. The offshore blocks cover a total area of approximately 15,000 square kilometres, with water depths ranging from about 1,000 metres to 3,000 metres.

 “We hope that the exploration efforts are successful, and we look forward to collaborating with our valuable partners Eni and Total, and the Government of Kenya in these blocks.”said Qatar Petroleum.

Following the deal, Eni (the operator) will have a 41.25 percent stake in the block while Total’s stake will stand at 33.75 percent. The financial details of the transaction were not disclosed.

“In line with its growth strategy, this opportunity strengthens Qatar Petroleum’s position in the exploration of frontier basins with significant hydrocarbon resource potential,” said Mr al-Kaabi.

Kenya has about 63 gazetted oil blocks, 27 of which have been assigned to 15 oil companies for prospecting including the State-owned National Oil Corporation of Kenya (NOCK).

The country plans to auction about 36 other blocks to bidders. Kenya’s crude oil is classified as light and sweet, meaning it has less sulphur (below 0.5 per cent) – an impurity that has to be removed before crude is refined into petroleum.

This type of oil is known to fetch higher prices in the global market because dealers find it easier to refine and it produces high-value products such as petrol and diesel.

It is, however, waxy and sticky, making it necessary to heat it during transportation.

Kenya and British oil company Tullow had expected to ship the first cargo of crude oil production from the South Lokichar oil fields this year, ahead of a major crude production in 2022.

The Ngamia and Twiga wells are expected to produce between 60,000 and 80,000 barrels of oil per day.

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