LONDON - Crude oil has been discovered in Kenya after exploratory drilling by Tullow Oil PLC yielded success at the first attempt, the country's president and the company both said Monday.
President Mwai Kibaki told local media the discovery was a "major breakthrough" for the East African nation, while Tullow exploration director, Angus McCoss, said the "good" oil find was "beyond our expectations."
The London-listed explorer said it found oil at a well in the north-western region of Turkana, where it is assessing the commercial viability of crude prospects in the Ngamia geological structure. The discovery continues Tullow's recent record of exploration success following major finds in Ghana, Uganda and French Guiana.
Tullow shares rose on the news. At 1255 GMT, they were up 66 pence, or 4.4%, at 1539p, outpacing the FTSE 100 index, which was up 0.7% at the same time.
"This is an excellent start to our major exploration campaign in the East African rift basins of Kenya and Ethiopia," said McCoss, adding that the find "bodes well for the material program ahead of us."
Kibaki hailed the find in an address to the nation, but cautioned that more wells would have to be drilled to see whether there was enough oil to warrant investment in production.
"It is...the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years. We shall be giving the nation more information as the oil exploration process continues," said Kibaki.
Tullow, which last month completed the long-awaited $2.9 billion sale of part of its interests in three Ugandan oil blocks to France's Total SA and China's CNOOC Ltd., has targeted East Africa as a potentially key hydrocarbon province. The three firms expect to get approval by next year for a major development of Uganda's nascent oil industry, including the construction of a pipeline and a small refinery.
Copyright (c) 2012 Dow Jones & Company, Inc.
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