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Small independent Kenyan energy firms are selling their stakes to large Western-based exploration companies as interest in the east African country’s energy potential increases.
Underpinning the Western interest is the discovery of oil in neighboring Uganda and Mozambique, which have similar geological structures to Kenya, provoking interest by major foreign oil for exploration, Nairobi’s Business Daily reported.
In its latest report, “A Dash for Gas and Oil in East Africa,” Citi Group noted, "We have seen an acceleration in industry activity recently with multiple seismic programs being acquired, more intensive drilling campaigns planned over the next 12 months, and continued deal activity. Total also recently agreed on a farm-in with Anadarko and Cove for five offshore blocks, which highlights the interest of large-cap oil in the region. We see continued interest from the larger players to gain access to the region with a number of smaller players establishing interesting acreage positions."
Mwendia Nyaga, former National Oil CEO and now an industry consultant said that exploration licenses have been issued to several foreign companies and recent applicants are considering partnerships to gain entry, commenting, "The licensing is unprecedented. All blocks are taken hence the partnerships."
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com