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Wednesday, July 4 2012 at 13:46-Tullow Oil and Africa Oil, the two firms exploring oil in Ngamia-1 well in northern Kenya said Wednesday they had discovered an additional 43 metres
of potential oil pay or thickness–potentially oil-rich underground sands.
This means the amount of potential oil find in the well has tripled since the initial discovery in March, as British explorer Tullow and Canadian Africa Oil suspended drilling on Block 10BB to test the flow of oil reserves.
The companies said in an update that the well had been drilled to a depth of 2,340 metres while expressing optimism the country’s find could be commercially viable.
Tullow said drilling was stopped 360 metres shallower than previous estimates after the well encountered the basin bounding fault– a fault that defines the limit of a prospective hydrocarbon accumulation– making it unnecessary to continue Ngamia-1 drilling operations.
The new discovery however raises the total net oil pay or oil column discovered in the well to 150 metres, nearly 10 times Tullow’s initial estimate of 17 metres before the drilling started. Net oil pay is the net thickness of an oil reservoir.
“In addition to the greater than 100 meters of net light oil pay in the Upper Lokhone Sand section previously reported, the well encountered an additional 43 meters of potential oil pay based on logs and the recovery of light oil, “Africa Oil, Tullow’s partner in Ngamia said in an operational update.
Tullow and Africa oil say they will move the oil drilling rig 31 kilometres away to Tullow Operated Block 13T, where the company plans to start drilling its Twiga-1 wildcat well in the third quarter 2012.
The rig will later be brought back to the Ngamia well to help in testing the well. The first well on Block 10 BB (Tullow 50 per cent, Africa Oil 50 per cent) in the Kenyan drilling campaign was the Ngamia prospect, which is similar to Tullow’s Lake Albert discoveries in Uganda.
Analysts at Citi Group had estimated the well could be holding 200-250 million barrels of oil, 50 million barrels short of the commercial threshold needed to develop an oil pipeline.
“While the well still needs to be tested, we estimate the discovered volumes could be 200-250 million barrels, which is already close to the commercial threshold for a pipeline development of 250-300 million barrels,” Citi Group said in a research note to investors last week.
The oil discovered in Ngamia is similar to that found in Uganda, which provides confidence that commercial flow rates will be achieved when the well is flow tested given that the net oil pay discovered in Kenya is already bigger than Uganda’s, which has confirmed oil deposits of 1.3 billion barrels.
“The net oil pay logged in Ngamia-1 is more than double that of any of Tullow’s East African exploration wells drilled to date. Although commerciality cannot yet be declared and much more exploration and appraisal needs to be done, we are very encouraged by the result and the follow up potential in numerous similar prospects we have identified, “Martin Mbogo, Tullow Kenya’s Country Manager, said in a statement.
The Citigroup report says the timing of testing operations in the Ngamia well remains uncertain as the partners wait for the arrival of additional testing equipment.
The East African