But exploration is getting more serious with companies starting to test the region’s virtually unknown deepwater areas. Several firms including Shell and Petrobras have shown interest in deepwater Tanzania though it is Kenya that is leading the pack.
Woodside Petroleum is lining up its first deepwater well off Kenya’s Lamu Basin in Block 5 around the end of this year. Several prospective targets have been identified, with Pomboo seemingly the top candidate.
Woodside is joined in the venture by Dana Petroleum and Australian minnow Global Petroleum. A second well on the adjacent Block 7, likely to be the Sokwe prospect, is planned by the consortium before June 2008. The two wells will be the first ultra deepwater wells in East Africa, and the first in offshore Kenya for more than 20 years. Previous drilling results dating back to the 1960s reported a smattering of hydrocarbon shows though none were fully tested.
But the potential is there. The two Woodside blocks have 50 leads in total, and are situated in the Northern Lamu Basin, roughly 200 km east of Mombassa, in water depths of up to 2,800 metres.
Unlike the patchy exploration of the past onshore, this speculative shot calls for a substantial investment commitment. The deepwater wells are expected to cost investors a cool US$100 million, though the rewards could, of course, be spectacular.
But this is unknown territory. Even Woodside chief executive Don Voelte has played down his company’s prospects in the area, suggesting last year that any well had only a 3 per cent chance of success.
So far, Total’s Simba-1 well has been the only Kenyan deepwater well - at 920 metres - in a separate basin to the north of Lamu. This reinforced perceptions that East Africa was at best gas prone, another deterrent to would-be investors in the past.
Nonetheless, others will be closely watching the results of the Kenyan drilling campaign. CNOOC Ltd, the listed arm of China National Offshore Oil Corporation, recently secured rights in six offshore blocks across the Laum, Anza and Mandera Basins.
Elsewhere in the region, interest is beginning to pick up in other new areas. Further south, ExxonMobil has staked its claim off little-known Madagascar, signing up to a joint venture with Sterling Energy on two blocks, Ambilobe and Ampasindava.
Mozambique is already producing natural gas for local industries and for export to neighbouring South Africa.
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