Kenya

In 2007, Vanoil signed a production sharing contract for Blocks 3A and 3B in Eastern Kenya. The total area included in the concessions is 24,912 sq km, which covers three important sedimentary basins. Vanoil's blocks are located adjacent to large concessions held by Marathon Oil and Africa Oil's and within the same basin as Africa oils 10A. Vanoil is extremely excited about the prospects of making a major find in Kenya and is currently reprocessing and interpreting seismic data.

Oil Industry in Kenya

The National Oil Company of Kenya (NOCK) was incorporated in April 1981 under the Companies Act, Cap 481 and charged with participation in all aspects of the petroleum industry. The company has a 100% Kenya Government shareholding.

The formation of NOCK was precipitated by the oil crisis of the 1970's(1973/74 and 1979/80) and the correspondent supply disruptions and price hikes which resulted in the country's oil bill comprising of almost one third of the total value of imports and therefore making petroleum the largest single drain of Kenya's foreign exchange earnings. In the national interest it was therefore felt necessary to have greater control of this crucial factor of the performance of the economy by having a company which would act as an instrument of government policy in matters related to oil.

NOCK became operational in 1984. Initial activities mainly consisted of exploration activities delegated from the Ministry of Energy. It was not until 1988 that NOCK went downstream and started importing crude oil into the country.

Vanoil's Kenyan Properties

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Block 3A - Hydrocarbons
Block 3B - Hydrocarbons


Block 3A

Resource Type:Oil, Natural Gas
Property Size:12,192sq km
Stage of Development:Exploration
Current Work Program:EIA, data interpretation & preparation of the 2010 seismic program
Potential:Unknown
Ownership: Production Sharing Contract(PSC) signed in October, 2007

Overview

In October 2007, Vanoil signed a Production Sharing Contract for Block 3A [12,192 km2] located mainly in the Anza Graben in northeastern Kenya. Vanoil chose Block 3A based on its technical merits following a study conducted by the company that identified several structural and stratigraphic leads. We believe this is a highly prospective region signified by our study and the signing of lucrative production sharing contracts by major oil corporations such as the Chinese National Offshore Oil Company [CNOOC] and Africa Oil Corp [Lundin]. In April of 2007 the Chinese National Offshore Oil company,(CNOOC) Limited, whose contracts cover a total of 115,343 square kilometers, acquired production sharing contracts for two Blocks, including block 09 located in the Anza Graben, and adjacent to Vanoil's Block 3A. Currently, CNOOC is drilling their first exploratory well in Block 09 with primary targets being Cretaceous and Jurassic reservoirs.

Exploration History

Exploration in Block 3A dates back in 70's when Chevron acquired seismic, gravity and magnetic data and drilled to two exploratory well [one well in Block 3A]. Subsequent exploration programs during the 80's by Amoco included acquisition of more 2D seismic and gravity data and culminated in drilling one exploratory well. The overall results of geological, geophysical, geochemical studies and drilling in Anza Graben including Block 3A have proved the existence of excellent quality Cretaceous oil-prone source rocks, in addition to good quality sandstone reservoirs and a multitude of structural leads. These potential targets remain to be tested in Block 3A.

Geology

The Block 3A acreage is confined to the Anza and Mochesa rift basins in northeast Kenya. Faulting in Block 3A was initiated in the Mesozoic period and has intermittently been activated through to Tertiary with creation of depo-centres filled primarily with fluvial-lacustrine, deltaic and marine sediments. The Block 3A acreage occupies a convergence area of three sedimentary basins of Anza and Mochesa with the third rift basin of Lamu Embayment occupying the adjacent Vanoil's block 3B to the south. The part of the Anza basin [Graben] in Block 3A constituted the rift termination zone of the Central African Rift System in north east Kenya. Anza graben forms the south-eastern extension of the prolific Melut and Muglad rift basins of Southern Sudan where a Cretaceous working petroleum system have been proved and oil discovered. Potential source rocks for hydrocarbon generation and evidences of a Cretaceous working petroleum system exist in Anza Graben in Chalbi sub-basin to the north-east of Block 3A. Relatively thick [locally <4,000m] prospective Cretaceous sequences are present in Block 3A. Prolific Melut and Muglad basins have equivalent Cretaceous sequences with a proven working Cretaceous petroleum system responsible for discoveries in the two rift basins.

Hydrocarbon trapping mechanisms in Block 3A include tilted fault blocks, faulted anticlinal closures and stratigrahic traps. The Anza rift termination zone in Block 3A is structurally interesting as a play zone and the detailed interpretation of the re-processed seismic data will further increase structural clarity on faulting and horizon imaging.

Current and Future Work Programs

The initial preliminary interpretation of the re-processed seismic data including the integration with gravity and magnetic data creating a basin model and delineating structural and stratigraphic leads have been completed. Currently Vanoil is undertaking the EIA program and also planning for 2010 seismic and gravity program in Block 3A. The final EIA report has been received by Vanoil from the Earthview Geoconsultants [EIA contractor] and presented to the Kenya National Environment Management Agent [NEMA] for issuance of the EIA licenses in accordance with legislative requirements. The 2010 seismic program will include acquisition of 324 line-km in-fill 2D seismic and approximately 1,025 gravity stations. The 2010 Seismic and gravity program will be undertaken to precisely define the prioritized leads and mature some leads to prospects and to drillable targets. Within the initial exploration period of three contract years and nine months, Vanoil will also drill one exploratory well to test generation and entrapment of hydrocarbons in Block 3A.

Regional Hydrocarbon Shows

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East Africa Exploration Activity

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Kenya Exploration Status

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Daily Nation - Fresh drilling lifts hope of striking oil in Kenya


Block 3B

Location:Northeast Kenya in Lamu Embayment Basin
Resource Type:Oil & Gas
Property Size:12,192 Sq Km
Stage of Development:Exploration
Current Work Program:12,192 Sq Km
Potential:Unknown
Ownership:Vanoil Production Sharing Contract (PSC) signed in October,2007

Overview

In addition to Block 3A, Vanoil's property in northeast Kenya also include Block 3B under PSC signed in October, 2007 and Vanoil has decided to retain the Block after a preliminary evaluation lasting approximately 21 months. Block 3B lies mainly in Lamu Embayment Basin to the south of Block 3A and it is relatively adequately covered by magnetic and gravity data with sparse seismic coverage. The Cretaceous basin-fill in the northwest portion of Block 3B was influenced by Anza graben depositional system resulting in development of local and possibly prospective Cretaceous depo-centres [2] with a relatively thick [>4000m] Cretaceous section. Two exploratory wells have been drilled in Block 3B, with a third well drilled by BP-Shell in 1969 located very close to the south-eastern corner of the block 3B acreage. The Block 3B is covered by approximately 475 line-km of fairly good re-processed 2D seismic data.

Geology

Most of the Block 3B acreage is located in the Lamu Embayment with a small portion of the block to the northwest probably in the Anza basin. It is also possible that a small area of Block 3B to the northeast is located in the Mochesa basin. The Lamu Embayment basin was initiated in the Karroo [Permo-Triassic] times during which an intra-cratonic, tri-radial rifts system developed in East Kenya. This development of the triple junction rifts system heralded the emergence of proto Indian Ocean and culminated in the failure of one of the rift branch which today constitutes the onshore Lamu Embayment basin. The failed Karroo rift extends to the Block 3B acreage. During the subsequent basin-fill in Block 3B the Karroo sequences have been buried thousands of meters below the oil window. During the Jurassic period, Block 3B area experienced marine transgression into the initial Karroo rift-graben which was accompanied by the deposition of mainly marine carbonates and minor shales under platform depositional systems. Faulting in Block 3B continued to Late Mesozoic and Lower Tertiary with emerging rift depo-centers being filled primarily by sediments deposited under fluvial-lacustrine, deltaic and marine depositional systems. The eastern portion of the Block 3B acreage was under marine influence in Middle Cretaceous during which potential source rocks shales and marine carbonates were deposited. During the lower Tertiary, non-marine continental depositional systems were extensive and similar throughout the Block 3B acreage. In the Upper Tertiary however, the southeastern portion of the Block 3B was under marine transgression that resulted in the deposition of Lower to Middle Miocene marine reefal carbonates, sands and shales. The marine transgression barely reached the Anza graben in the Block 3A. In Block 3B, the Lower-Middle Miocene marine sequence is capped by Pliocene to Quaternary coarse fluvial deposits.

Exploration History

Past studies [Geological, geophysical and geochemical] of Block 3B proved the existence of possible fair-good quality oil-prone source rocks [shales] in the Cretaceous section, in addition to good quality sandstone reservoirs in the Lower Tertiary and several structural traps. All these possible leads require further in-fill seismic for precise definition and maturing some of the leads to prospects and to drillable targets. The prospectivity of the eastern area of Block 3B is strongly influenced by a structure which continues from southeast to the north along the eastern portion of Block 3B as broad areas of Cretaceous strata on-lapping Jurassic formation. From the scarce seismic data this structural lead is attractive and needs further investigation.

The Robertson Research analytical data [1986] suggest that the sedimentary sequences penetrated in Bahati-1 well in Block 3B enter the oil window at 2,400m. The Bahati-1 well encountered Gilsonite, which could be interpreted as degraded, solid residue of generated oil and migrated earlier the Bahati structure, or modified surface seepage oil incorporated into the sediments during their deposition. The Meri-1 well drilled also in Block 3B reached Eocene stratigraphic level and did not test the Cretaceous section play. Geochemically analyzed source rock samples mainly from the Lower Tertiary formation were lean in hydrocarbon sourcing potential containing less than 0.55 TOC. However, Meri-1 well did not reach the Cretaceous formation level which is considered to be prospective, thus the area remains unexplored.

Current and Future Work Programs

Vanoil has completed the re-processing and initial interpretation of Block 3B limited seismic data [approximately 475km] resulting in delineation of possible leads in the Cretaceous and Jurassic plays. The re-processed [new] seismic data has now been integrated with gravity and magnetic data resulting in the recommendation of the following future exploration programmes in Block 3B: During the initial exploration period of three [3] contract years, Vanoil will acquire high density airborne gravity and magnetic date over Block 3B followed by an in-fill 2D seismic programme to clearly define and mature some of the leads to prospects and to drillable targets. In the process of defining drillable targets [prospects] Vanoil may undertake 3D seismic programme. The conclusion of the initial exploration period will be drilling of an exploratory well to test the generation, entrapment and accumulation of hydrocarbons in Block 3B. Meanwhile, Vanoil continues with the EIA programme in Block 3B and planning for re-negotiation of the Block 3B PSC mainly the economic terms and work programme.

Vanoil has already established that Block 3B is adequately prospective and would like to progress further with its petroleum operations, however, Vanoil evaluation of Block 3B has also revealed some important technical factors specifically the sparse data coverage of the existing geophysical data and poorly defined petroleum system attributes. To address the negative technical factors emerging from the preliminary evaluation of Block 3B, the economic terms and exploration work program commitments in the signed Block 3B PSC will have to be re-negotiated.

Regional Hydrocarbon Shows

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| View PDF
East Africa Exploration Activity

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Kenya Exploration Status

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Related Articles:

Daily Nation - Fresh drilling lifts hope of striking oil in Kenya
 
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