Kenya

In January 2007, Gippsland Offshore executed a Farm-in Agreement to the Pancontinental Oil and Gas Production Sharing Contract for Block L-6 (4,918km2) offshore Lamu Basin in Kenya.

The area is poorly explored and understood but wells in the block indicate oil and gas prospectivity. To date, mapping in the block has located four key leads with potential to house an unrisked 1.1bbbls of oil and 5.5TCF of gas. FALCON® and new 2D seismic data have been acquired this year and Gippsland Offshore currently finalising the prospect mapping in preparation for signing onto the next phase of the PSC which commits 2 wells in 4 years. Gippsland Offshore was granted a 6 month extension to this sign off date which brings it to the end of April 2008. The extension was granted whilst the government released the onshore exploration data needed to integrate with the newly acquired seismic and FALCON(R) data.

Gippsland Offshore is currently finalising the terms of the new PSC with the Kenyan Ministry of Energy.

Gippsland Offshore has earned 60% equity in the L-6 block and operates on behalf of the L-6 joint venture. 

Kenya, with its high petroleum prospectivity, attractive Government commercial terms, proximity to the growing East African and Indian energy markets, is a high quality component of Gippsland Offshore’s ongoing exploration portfolio.

Kenya has recently been in the news following a contested election in late December 2007. Both the government and opposition are actively engaged in mediation talks that have recently resulted in reduced incidences of violence in the western region of the country. The eastern part of the country where L6 sits and the majority of the oil exploration is taking place has remained unaffected. Indeed the on ground exploration activities of Lion Petroleum, Vangold, CNOOC and Lundin continue unabated.

Recent intervention by the US State Department, European Union, African Union and the rest of the world augurs well for the outcome of the talks

Updated 25 March 2008