Adamantine Energy, Bowleven Lose Kenya’s Block 11B

Kenya’s Block 11B operator Adamantine Energy and joint venture partner Bowleven will not be receiving an extension on their license according to commissioner for petroleum Ministry of Energy and Petroleum Martin Heya.

Speaking to OiNews Kenya the commissioner without elaborating why said the license is now vacant after expiring in June 2016 and will be up for auction once the country advertises all unoccupied blocks.

“We have decided we will not renew their license,” Heya told OilNews Kenya.

The JV partnership which had earlier been awarded a one year license extension to enable evaluation ahead of second phase decision with completion of acquisition processing and interpretation of 2D seismic on block 11B remaining among the key objectives failed to use the opportunity and squandered it engaging in legal battles at the English High Court.

The English High Court in the case of Adamantine Energy (Kenya) Limited v Bowleven (Kenya) Limited [2016] EWHC 130 (Comm) ruled that what happened on 25 February 2015 was not a valid ‘drill or drop’ vote under the SPA, and that Bowleven therefore did not have to transfer its interests under the PSC.

Under the farm-in agreement in September 2012 Bowleven was to fund the work programme for the initial two year exploration period at an estimated cost of $10 million including an airborne geophysical survey and the acquisition of 2D seismic. Bowleven would also provide technical support to Adamantine, as operator, under a TSA during the initial exploration period.

Block 11B covers an area of approximately 14,200 square kilometres covering the Loeli, Lotikipi, Gatome and South Gatome basins. The basins are to the north of the Lokichar Basin where a significant oil discovery has been made in recent months with the Ngamia-1 well.

Analysis of the existing gravity and magnetics and seismic datasets suggest the basins in block 11B are of similar form to Lokichar and analogous geological plays and petroleum system elements are expected.