Zarara Oil and Gas Gets 18 month License extension in Kenya’s block L4 and L13

Zarara Oil and Gas the operator in block L4 and L13 located in Lamu County has received an eighteen month license extension to January 2019 after the lapse of an earlier 18 month licence extension through to June 2017 to the First Additional Exploration Period on both of the production sharing contracts expired on June 3rd 2017.

The extension is on condition that the company must spud by or before 31st December 2017.

The company that is preparing to drill the Pate 2 well in Block L4 (an appraisal well following a gas discovery at the Pate-1 well drilled by a Shell and BP consortium in 1971) says it expects to commence mobilization of the ring as soon as civil works are complete and Pate 2 likely to spud in August or thereafter. The well expected to reach a depth of 4500 meters will take 120 days to drill, test and complete. A second well Pate 3 is scheduled to be drilled thereafter using the same well pad as Pate 2 using directional drilling technique to a vertical depth of 4500 with the total measured depth will be approximately 5,000 metres. The required drilling time to approximately 120 days to drill, test and complete.

It is unclear right now on the new requirements under the new extension although the drilling of a well in block is likely therein with preparations having already commenced. Besides Pate 2 there are plans to drill Pate-3 from the same pad as well as 13 other leads earlier identified by Rockflow Resources Limited  in both blocks.

Prior to the planned drilling of Pate 2 the company has already carried various studies including aero-gravity/magnetic survey conducted by Zarara in 2011 and 374km of seismic lines acquired by Zarara in 2012. An ESIA was carried out by ESF consultants a regional Environmental Management firm with regional offices in Nairobi Kenya.

Already OilNews Kenya has reported that the company has contracted Norwegian company North Sea Well Engineering Limited (Norwell Engineering) as the design and planning company that will ensure everything goes as plotted. Among its first chores will be the deciding of the road route as well identifying and considering ports and jetties that will be utilized in the process. Other companies contracted as reported include: Greatwall Drilling Company Ltd has been contracted to drill Pate 2 well, Medivac-Kenya will provide medical services to the workers in camps while corporate security company and risk management contractor Salama Fikira will be in charge of security.

Depending on the success of the appraisal wells Zarara Oil and Gas envisages the optimal development of the gas resources to generate electricity in both Blocks L4 and L13 in a phased manner, balancing the knowledge obtained as the drilling program is undertaken with growth in Kenya’s electricity demand. The first phase assumes the appraisal drilling and completing for production of at least two wells.

Depending on the number of wells and their deliverability, the natural gas would be converted to electricity to supply up to 200MW of Base Load power to be sold under normal Kenyan ‘Take or Pay’ agreements. The gas sold and the power it generates would be connected to the national electricity grid, which was extended in 2015 up to a substation at Port Lamu, located less than 15 kms from the Pate well location.

Zarara Oil and Gas Limited (‘Zarara’) which holds a 75% working interest is a 100% subsidiary of Midway Resources. CH-Swiss Oil Holdings International holds 15% and the National Oil Company of Kenya at 10%. MRI has negotiated a legally binding heads of agreement for the eventual acquisition of the 15% interest of CH-Swiss Oil Holdings.