HISTORY: OIL EXPLORATIONS IN KENYA

1954
In 1954, BP and Shell start exploring in Kenya in the Lamu Embayment. Drilling of first well occurred in 1960. None of the wells were fully evaluated or completed for production despite evidence of oil staining and untested zones with gas shows.
1975
In 1975, several consortia acquired acreage in the Lamu Basin, drilled and encountered oil and gas shows in the Cretaceous and in 1976, Chevron and Esso drilled in the Anza Basin and discovered suspected hydrocarbons and microfossils. 
1986
1986 saw the petroleum exploration and production legislation change in Kenya, with the revisions providing the necessary incentives and flexibility to attract international exploration interest. 
1985 - 1990
Between 1985 and 1990, ten wells were drilled by Amoco and Total. The wells were dry but there were clear indications of hydrocarbons. 
1995
In 1995, National Oil completed the Lamu Basin study and as a result the Lamu Embayment was sub-divided into ten exploration blocks and another two were created before 2001.
2000 - 2002
Between 2000 and 2002, seven Production Sharing Contracts have been signed and Woodside completed 7,884 km to 2D seismic of the off-shore Lamu Basin. In addition, the Tertiary Rift Study was completed in 2001 which led to the quantification of potential source and reservoir rock units in the area as well as petroleum system play in the sub-basins. 
2011
In 2011, we see 12 oil exploration companies operating in the country and a total of 24 licenced blocks to date out of a total of 38 (as of June 2011). 
2012
Africa Oil Corp. and Tullow embark exploratory drilling in Kenya. In Block 10BB (Kenya), they completed drilling the Ngamia-1 exploration well to a total depth of 2,340 meters and reported a significant light oil discovery. The Ngamia-1 well encountered over 100 meters of net light oil pay in the Upper Lokhone Sand section and an additional 43 meters of potential oil pay in the lower Lokhone Sandstone section.

Source 
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THE VOYAGER ZIWANI

Today i do an out of the norm post because we have been doing some serious posts lately , its birthday month for us so am allowed to deviate a bit. You know those pamphlets they hand you, tour operators and promoters, when at an exhibition or a fair, with descriptions and pictures of various places you could visit and the various attractions they have and you're unimpressed? Well a few weeks ago I was handed one for a little place at the edge of the Tsavo West National park, The Voyager Ziwani. Apart from the pictures of the “spacious tents that offer the classic ambiance of a traditional African camping safari” the rest looked ordinary until we actually arrived to this private sanctuary.

This was part of the BAKE (Bloggers Association of Kenya) award prizes that this and fellow winning blogs from the food category (pikachakula.com) Photography (MutuaMatheka.co.ke) and the travel category (kenyataalii.com) were awarded in collaboration with Uniglobe Northline Travel  and Heritage Hotels East-Africa who sponsored the trip.  

What i actually saw was what was in the pamphlet .....and then some!!! Ziwani was a marvelous place. The first thing I noticed on arrival was that being close to the Tanzania border there was little or no coverage at all but with some networks it was possible to roam. You could simply disappear into nature when here. The tents were fully furnished with an en suite bathroom and tiled floors all this without losing the camping tent touch.  But what impressed me the most were the sunsets. The sun sets right behind Mt. Kilimanjaro and with the dining area and fire place overlooking the Ziwa Dam the evening reflection of sundown rays was quite the view!

Sunset that disappears behind Mt Kilimanjaro

Next in the line of impressive was Lake Chala. This small caldera lake (or Crater Lake as some call it) is right at the boundary of Kenya and Tanzania and you could even see the Tanzanian side from the Kenyan side we stood. The view from the top was to behold but the journey to the bottom was a bit rough but our guide took us to the bottom safely.

L. Chala from the top

The lake, as I was informed by one of the locals had no inlet but had an outlet underground. I Wasn't sure but I will research and get some answers to where it gets its waters from. The blue waters were unpolluted and two of us decided to have a dip.

Found this kid fishing by the shore and just so you know i caught my first fish that day. proud moments!!

Swimming was not one of my favorite activities so I let it pass but I made it a challenge  to learn how to swim.

Before we went to Chala we passed through a farm, Gicheha farm.

an antique plough that was still in use

 Impressive were their irrigation techniques not only because of the scale of their operations but also in the simplicity in their methods. They grew maize and tangerines in large scale while also experimenting with Yellow Passions and Bananas.

We left with a bag-full of tangerines each - very sweet those! (now a funny fact about some of the goats they keep there. The males they use for mating do so in the ratio of one goat for every hundred females -no Viagra no nothing!)

Also included was a visit to the World War 2 battle fields and  the Sniper tree- sad story to it though…

the mkamba in him made one M. Matheka climb the tree looking for honey 

From the night game drives

to the game walks,to those Barbecue dinners and sunrise breakfasts

passing though the crystal clear waters at the Mzima springs.

on their way to Mombasa

water so clear you could see those little blue fishes

about the Mzima springs for those who don't know 

Forget the coast December holidays and TEMBEA KENYA!!! 

PEACE OUT!!

sorry for the bad quality pictures but see more crystal clear ones of both Gicheha farm and Ziwani from the links below
http://www.flickr.com/photos/38577759@N06/sets/72157627501124392/ (Gicheha farm)
http://www.flickr.com/photos/38577759@N06/sets/72157618475288970/ ( Voyager Ziwani)
Also see more pictures here (via @potentash) 

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OIL: LESSONS FROM NIGERIA

The potential benefits are clear. Countries that have historically lacked investment in infrastructure will see roads and pipelines built. Handled well, the capital investments and the revenues could be a shot in the arm for economies that are already on an upward curve, experiencing strong and sustained economic growth — albeit from a very low base — for the better part of a decade. However, with the hope that oil money will amplify East Africa’s business boom, come fears of the ‘resource curse’ — the corruption, environmental degradation and social disintegration that has often resulted from the exploitation of hydrocarbon reserves in the developing world. Few would begrudge Kenya an opportunity to escape the poverty and aid dependence that has dogged it since independence, but the risks of haste are huge.

The spectre of the Niger Delta, 3,000 miles west on the Atlantic coast, looms large. In exploiting this frontier region’s natural resources, Nigeria’s entrenched elites have fostered decades of criminality, corruption and violence. Institutionalised graft means oil revenues are squandered and misappropriated. Average citizens see little of the benefits of the industry.

In the Delta, local minority peoples, such as the Ogoni, were already discriminated against before oil raised the stakes. Leaders from the central government took advantage of the under-development and under-representation of locals to take their land. They passed land rights on to oil companies and maintained their own power through systems of patronage, with the right mix of ‘dash’ — bribes — creating a culture of dependency that remains almost impossible to break.

At the same time, Nigeria’s government escalated the repression of dissident locals, violently cracking down on nascent protest movements. The execution of the environmental and social activist Ken Saro-Wiwa in 1995 still stands as a testament to the inhumanity of Nigeria’s military administration. Saro-Wiwa and eight others killed at the same time — Saturday Dobee, Nordu Eawo, Daniel Gbooko, Paul Levera, Felix Nuate, Baribor Bera, Barinem Kiobel, and John Kpuine — were leaders of a non-violent protest group, the Movement for the Survival of the Ogoni People, campaigning for representation and the enforcement of environmental regulations in their region.

The oil industry’s big players have themselves paid a big price for the entrenched conflict and corruption of the Delta. In August 2012, Shell’s security bill in Nigeria was leaked to the pressure group Platform: in the course of three years, the company had paid $383 million to mitigate the risks of violence around its plants. Oil money has fueled graft, kidnapping and militancy, and allowed companies to pay their way out of responsibility for environmental damage. Ultimately, it has led to the industry being widely seen as corrosive to the country’s future.

Ogoniland is on the other side of the continent, and Kenya is not Nigeria. But local and international observers have pointed to some alarming similarities.

Land and ethnic identity have often been at the center of Kenya’s troubles. Politicians have fostered economic opportunities for their kinsmen. Some have even moved their people en masse onto better land, displacing indigenous people from the forests in the Mau or the fertile lands of the Central region, and creating generations of violent conflict. The pressure valve last blew in 2007, when accusations of vote-rigging in a general election exploded into ethnically charged violence. Neighbors killed neighbors. More than 1,000 people died and many more were displaced.

Institutionalised nepotism in central government has also contributed to a total neglect of Turkana county, both before and since independence. The Turkana are poorer, less healthy and have less access to education than their countrymen. The region feels viscerally like another country — another world — after the skyscrapers, expat bars and traffic jams of Nairobi.

Article by Peter Guest (read full article here)

BLOCKS, OIL AND GAS COMPANIES AND THE GOVERNMENT - DEALS OR DISASTER IN WAITING?

 March 26 2012 : “We have good news for Kenyans. The good news is that we have struck oil in the Ngamia-1 well in Turkana.”  A beaming Former President Mwai Kibaki announced. Since then a flurry of conferences, seminars, meetings and deals have been signed. Nothing tangible has come out of it but hope still lingers.
However the then Minister of Energy Hon. Kiraitu Murungi was optimistic with a pinch of caution
“We have been very cautious about this. We have drilled 31 other wells in Isiolo and Lamu without success, but now we can authoritatively say we have oil.”
Kenya currently has 51 exploration blocks. Originally there were only 46, that include offshore and inland blocks. The term Tullow’s Turkana Block 10BB has become synonymous with oil in Kenya being the block where substantial oil was first struck by British company Tullow.
A non-refundable fee of $ 1 million is paid to the government to purchase one of these blocks and this was originally on a first come first serve basis. With the oil find, stakes were raised. Now purchase of blocks is done in a public auction with the highest bidder getting the rights to the block. Four blocks are up for auction. The four originally belonged to Tullow and Norwegian Company Statoil who relinquished rights to the blocks. This is because explorers are now required to relinquish 25% of their acreage every two years meaning the bidding wars could become more fierce as the years go by.
In dealings with these international oil companies the government enters into Production Sharing Agreements. These are basically contracts signed between them and oil companies where it awards the execution of exploration and production to the oil company. When production eventually starts the company has to split the profits from the sale of its product with the government. The country currently has over 24 companies with oil and gas licenses with the number expected to rise with the sale of the new blocks.
Concern however is the number of international companies that hold licenses. Apart from government owned National oil Company NOCK and Rift Energy the rest are international companies some with local subsidiaries. Most of them hold these parcels of land in part ownership with each other. Tullow for example hols 50% stake in BLOCK 10BB and 70% in BLOCK 10A with Africa Oil owning the remainder both in Northern Western Kenya. Canadian company Taipan Resources recently bought BLOCK 2B near Mandera and also holds 20% rights in BLOCK 1 owned 80% by Lion Petroleum also near Mandera.  Off shore blocks in the coast are mostly gas blocks and major players have a joint PSC agreement with the government. BLOCKS L10A and L10B are jointly owned by The B.G group, Cove Energy, Premier Oil, And Pancontinental Oil and Gas. In BLOCK 10 B.G group owns 40% while Cove, Premier and Pancontinental hold 25%, 20% and 15% respectively. In BLOCK 10B, B.G Group owns 45% equity while Premier Oil owns 25% equity. The rest is shared equally between Cove and Pancontinental at 15%. France’s Total holds 40% stake in 5 oil BLOCKS in Lamu L5, L7, L11A, L11B together with Anadarko and Cove energy all off the coast. First Australian Resources (FAR) also holds 60% stake in block L6 also off the coast with 40% held by Pancontinental. Pancontinental also jointly owns block L8 and L9 off the coast. China also hasn't been left behind as its influence in Africa grows as the West keeps playing politics. China National Offshore Oil Corporation CNOOC and Africa Oil jointly hold rights in BLOCK 9 (50% equity) in the oil rich Anza Basin. Africa Oil also holds 20% and 50% share in BLOCKS 2A and 13T all inland blocks. The map below shows some of the blocks in Kenya and ownership.

Credits
Investment in oil is an extremely expensive venture and partnerships are the norm rather than the exception. But the oil industry is a very volatile one especially when it comes to the issue of sharing the proceeds. The Government should ensure that these partnerships are beneficial to themselves and more importantly to the country. I think the National Oil Corporation should have been more involved to make sure it gains, most importantly, from expertise rather than financially but then again time will tell if we are on the right track.

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IS NAIROBI SINKING?

The current policy of  Nairobi Water and Sewerage Company NWSC is to rely solely on surface water, but it is likely that the use of groundwater will in future be critical in providing adequate service levels for the growing urban population and as a strategic reserve in times of drought. Groundwater, from water wells, is mainly used by large private operators such as industry and hotels to supplement Nairobi Water and Sewerage Company (NWSC) supply. Annual reading is the responsibility of NWSC and is used as a basis for levying waste water charges.The drilling of boreholes started in the 1930's – and the number of water wells in greater Nairobi increased from fewer than 10 in 1940 to almost 2,000 in 1997 and further increased to 2,250 in 2001 as a result of the drought. Over-exploitation of groundwater resources is likely to become an emerging issue. The increase in demand for water has led to unregulated exploitation of groundwater and it is thought this might lead to undesirable effects such as the lowering of the water table. For instance, during the 1999/2000 drought the criteria of 800 m-separation distance for sinking boreholes was ignored and this could have long lasting effects. While there might not be any immediate threat of land subsidence, there is the potential risk of local infrastructure and building damage. Nairobi was once a swampy area and the presence of clay and silt layers in the shallow subsoil, and of unconsolidated fractures and cooling joints, may be potential sources of subsidence. The problem has occurred elsewhere in the world: thus, Mexico City sunk by more than 10 meters in the last 70 years from over-exploitation of groundwater.
 That said What if Nairobi suddenly became a Venice?  We could end up like this

or maybe we could become like some parts of India

 maybe not. But we could do with another Mombasa or not again.

source: (UN Habitat 2000 in UNEP/DRSRS undated).

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OCTOBER 1st 1940

In October 1 this year it will be 73 years since the Mining act became law. Drafted and legalized in 1940 it is one of the oldest laws in Kenya. Reviews have been done only two times in 1972 and later 1987. The problems plaguing the mining sector can be traced back to the bill but with the draft Geology Minerals and Mining Bill order might be restored in the industry.
Transparency, management and revenue allocation have been the emphasis of this new bill. 35% of shareholding by locals of foreign companies that invest in mineral mining seems to be most notable inclusion in the bill. Before, firms paid a meager  5% of their gross revenue to the national government  which was outrageous considering the millions these companies shipped abroad. In the draft law royalties on sales of the minerals are calculated based on the value of the minerals. the higher the value of the mineral the higher the royalties paid. Critical also was the definition other word "Mineral" which had not been defined before. This will hep determine under whose jurisdiction they fall to.

Various bodies will also be formed, making the department of mines and geology under the the former ministry of environment and natural resources, defunct. This decentralization will lead to the formation of the Kenya Geology  Minerals and Mining Authority, The Kenya Geological Survey, The Mining Directorate, The Kenya Mining Investment Corporation and the Mining Disputes Resolution Tribunal. The functions of these bodies must however be clearly outlined to avoid the repetition of roles and conflicts of interests with other constitutional bodies like the national land commission and the judiciary  it will also seek to increase the number of mining licenses and raise more money from issuance of exploration licenses.

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