Kenya Upstream Sector Paints Gloomy Future For Oil Exploration, Brighter Development Phase in the Next 12 months

In 2019 only one well was drilled in Kenya in the Lamu Basin Block L3 by Zarara Oil and Gas although it did not reach its expected total depth of 4500m largely due to lack of finances. This was a as result of companies maintaining the cautious optimism in the rebound in oil prices which witnessed an average $69 a barrel. In many cases the majority of companies that had any activity in their respective blocks missed their work commitments in the contracts although in most cases the commitments are not public.

In 2020 there is expected to sustained low periods of exploration with few IOCs mainly new companies drilling in Kenya for the first time in their respective blocks. As in the past 2 years the majority of the companies will be necessitated by contract obligations with oil prices expected to remain unpredictable with tensions in the Middle East expected to be the main cause where increase in prices is expected..

Kenya could see a resurgence of exploration works offshore while there is still expected to be little or no seismic acquisition.

The outlook thus paints a dull 2020 for the upstream oil and gas sector in Kenya especially in the exploration phase and until boardroom negotiations conclude as partners in the south Lokichar basin head for the development phase. Still in the tertiary blocks 10BB and 13T the early oil pilot scheme is expected to continue with increases in transportation and production expected from the Amosing and Ngamia fields.

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