Nearly eight months after OilNews Kenya published that the National Oil Corporation of Kenya (NOCK) was internally discussing exercising its right to back-in in Blocks 10BB and Block 13T the government backed explorer has said it is raising $2 billion to take stakes in the two blocks.
According to Reuters citing the firm’s spokesman Joram Temesi NOCK will raise $2 billion through its internal sources, external debt and through equity partners.
Just as the situation was in June last year when managing director Sumayya Athmani talked to OilNews Kenya the oil explorer has not decided on exactly what equity it will take although the NOCK receives a 10% share in production once commercial quantities of oil or gas are found according to the current agreements.
“If the Government exercises its option to participate, the contractor (or each entity constituting the contractor pro-rata) shall transfer to the Government that percentage interest specified by the Government. The Government’s participation shall be effective from the date the development plan hereof is adopted,’ reads part of the current Kenyan PSC.
However, this would be amended to a 10% initial stake, which increases to 25% once production begins .
It also remains unclear as how much money is needed in the longrun to buy the desired stake.
Once the government participation has kicked in shall own and separately take and dispose of its share in the petroleum produced and saved to which the contractor is entitled under this contract in respect to all decisions taken under the participation agreement.
The latest Gross Contingent Resource estimates for discoveries in Northern Kenya as per Africa Oil is at 1.29bboe up from 660mmoe in 2013.
Tullow Oil and Africa Oil are the partners in the two blocks with 50 percent interest with the British company being the operator.