CAMAC Energy Incorporated, a US-based company involved in the exploration, development and production of oil and gas, has committed to invest US$ 33,650,000 (KSh 3 billion) in the exploration of four oil blocks in Kenya’s Indian Ocean coast.
The blocks cover a total surface area of about 37,000 square kilometers and two of the four blocks — L27 and L28 — are located in more than 3,000 metres of ultra-deep water of the Indian Ocean in Lamu Basin.
“This is quite significant considering that undertaking oil and gas exploration operations, particularly in deep waters is very capital intensive and underlain with very high risk levels,” said Mr. Davis Chirchir, the Energy and Petroleum Cabinet Secretary, on Thursday.
He said this in a speech read on his behalf by Environment and Natural Resources Cabinet Secretary, Prof Judy Wakhungu, during the opening of CAMAC’s Kenya offices in Nairobi, the Kenyan capital.
Mr. Chirchir commended the CAMAC Board of Directors for its commitment to the massive investment besides the requirement to fulfill other non-cost recoverable financial obligations such as training, surface and community development fees.
“For CAMAC to endeavour to commit such level of funding in the four blocks is a clear manifestation of the confidence the company has in the country’s existing petroleum potential and institutions of governance”, said Mr. Chirchir.
He further underscored his ministry’s commitment to putting in place appropriate legal and regulatory framework in line with the provision of Kenya’s Constitution 2010 on natural resources.
“On my part as Cabinet Secretary for Energy and Petroleum, I want to take this opportunity to assure you of the government’s commitment to creating an enabling environment that will guarantee returns on investments for oil companies while at the same time generating additional revenue which can be ploughed back into the economy for improvement of the standards of living of the people of Kenya,” he said.
The CAMAC Energy investment comes at a time when the Government, in its quest to attract Foreign Direct Investments (FDI) to the country, has pledged to facilitate oil and gas companies in the processing of their tax exemptions for duty, Import Declaration Fees (IDF) and Value Added Tax (VAT) on goods, equipment and services they procure and/or import into the country to accelerate their exploration programmes.
The CAMAC Energy Inc Chairman and CEO, Dr. Kase Lawal, said the Kenya offices were opened in compliance with the legal requirement that any licensed oil company must establish a place of business in the country.
“The opening of the Kenya offices signifies the company’s commitment in implementing the minimum work and expenditure obligations as stipulated in its four Production Sharing Contracts for Blocks L1B, L16, L27 and L28”, said Dr. Lawal.
The opening of the comes hot on the heels of a September 2012 visit to the CAMAC facilities in Nigeria by a high-powered, six-member government delegation, including four Members of Parliament hailing from areas where oil and gas exploration operations are being undertaken.
CAMAC’s decision comes against the backdrop of the recent discovery of crude oil in two exploratory wells in the Tertiary Rift Basin in Turkana County and natural gas discovery in offshore well in Lamu Basin.
Significantly, the opening of the Kenya offices will provide CAMAC with a reliable base from which it can conveniently plan effective execution of its work programmes in its licensed blocks.
CAMAC’s principal assets include offshore oil and gas leases in deep water Nigeria which include the currently producing Oyo Oilfield, and six recently acquired exploration blocks in Kenya and The Gambia.
The Company is pursuing further additions to its exploration portfolio in East and West Africa.
Founded in 2005, the company has offices in Houston, US, Nairobi, Kenya, Banjul, Gambia and Lagos, Nigeria.