Crude oil exploration in East Africa has received a major boast in the form of Danish giant Maersk Oil’s acquisition of stakes in five exploration blocks in Kenya and Ethiopia.
Maersk Oil, a subsidiary of global conglomerate Maersk Group, has entered into an agreement with Canadian firm Africa Oil Corporation, in terms of which it will acquire stakes in five exploration blocks in the two neighbouring countries at a cost of $845-million.
The transaction, which is subject to government approvals in both countries, will see Maersk Oil acquire half of Africa Oil’s shares in three onshore exploration licences in Kenya and a further two in Ethiopia.
The deal involves the acquisition of a 25% interest in block 10 BB, a 25% stake in block 10BA and another 25% stake in block 13T, all in Kenya. The company has also acquired a 25% interest in the Rift Basin block and a 15% stake in the South Omo block, both in Ethiopia. Africa Oil has been operating the blocks in partnership with Tullow Oil.
Maersk Oil CEO Jakob Thomasen says the company is committed to pursuing profitable growth by focusing on expanding within its core geographies.
“We are rebuilding the exploration business with new acreage positions and predevelopment discoveries to balance the risk profile in our portfolio,” he says.
He adds that, as part of Maersk Group, the company is in a position to take advantage of the opportunities arising in current market conditions and that the investment adds to an already attractive nonoperated onshore portfolio that includes a 25-year presence in Algeria.
The exploration areas cover the Turkana region of northern Kenya and southern Ethiopia, where Tullow Oil has already made crude oil discoveries in some of the blocks.
UK firm Tullow Oil, which has been undertaking exploration activities in the blocks, has made oil discoveries in blocks 10 BB, 10 BA and 13 T, which are part of the Maersk Oil deal.
Africa Oil CEO Keith Hill says the deal is timely and will boost not only exploration activities but also plans to build related infrastructure.
“We believe Maersk Oil brings significant technical, financial and infrastructure development capabilities at a time when the Lokichar development and related pipeline projects are moving towards sanction,” he states.