follow us like us subscribe contact us
Loading, please wait

KENYA: Jordanian Company Quits Exploration License

By Editorial Dept | Thu, 14 February 2013 20:48 | 0

Bottom Line: The decision by Jordan’s Edgo Energy to relinquish its offshore exploration license opens up opportunities for new explorers but highlights two key problems: the technical difficulty of drilling in Kenya’s deep waters and the security implications of exploring in this maritime border area which is still disputed by Somalia and Kenya.

Analysis: Edgo Energy’s license area is Block L26, which is a technically challenging (and expensive) drilling area, which lies in ultra-deep waters of the Lamu basin. Edgo acquired Block L26 in July 2012 in a joint deal with Qatar First Investment Bank. Along with the technical difficulties and the expense of drilling here, a border dispute between Kenya and Somalia places this block right in the firing line.  

There remains a great deal of uncertainty over how Somalia will eventually respond to Kenya’s bullish move to auction off exploration blocks in disputed territory. The heart of the issue is whether the maritime border should run directly east, parallel to the line of latitude. This was how it was drawn up in a 2009 memorandum of understanding; however Somalia has rejected that and instead wants the maritime border to run perpendicular to the coastline. This would give Somalia a larger swathe of offshore waters - some areas of which have already been auctioned off by Kenya to Anadarko, Total and Eni, as well as some smaller companies, like Edgo.

Kenya - empowered…

To read the rest of this article Start a FREE subscription to our premium publication

Oil & Energy Insider - 30 day Free trial

30 day Free trial
A FREE Subscription Includes:
  • Investment advice normally reserved for hedge fund clients.
  • Market & sector research not available anywhere else.
  • Strategic advice from corporate & military intelligence analysts.
  • 9 Weekly Investment / intelligence reports.
  • Full access to all previous reports.
  • 30 days free trial.
Get FREE access to our research for 30 days

An essential resource for all investors in the energy sector whether you're a trader, fund manager or individual investor - this inside look at the energy markets is unlike any other report or service currently available.

About the author

More recent articles by Editorial Dept

Fri 19 December 2014
The Latest Hot Spot For Offshore Oil
Fri 19 December 2014
Global Energy Advisory - 19th December 2014
Fri 12 December 2014
Will Low Oil Prices Shatter LNG Hopes?
Fri 12 December 2014
Global Energy Advisory - 12th December 2014
Fri 05 December 2014
The U.S. Gas Pipeline Network Undergoing Major Overhaul