Tullow Says Kenya’s Oil Potential May Exceed Uganda

(Corrects location in final paragraph of story published May 16.)

Tullow Oil Plc (TLW) Chief Executive Officer Aidan Heavey said Kenya’s oil potential may be greater than neighboring Uganda, where the company and its partners have found about 2.5 billion barrels of resources.

“What surprised us in Kenya was that the first well had such a big section of oil,” Heavey said in London. Drilling at Tullow’s Ngamia-1 well revealed more than 100 meters (328 feet) of oil, more than double the amount at its other East African exploration wells, the company said earlier this month.

Tullow, which has unlocked billions of barrels in frontier regions from Ghana to French Guiana, is seeking to replicate those finds in East Africa. While Kenya has no proven oil reserves, Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) found natural gas in its Anza Basin in 1976. Tullow is working with Total SA (FP) and Cnooc Ltd. (883) to develop oilfields over the border in Uganda, where it expects to start production as soon as this year.

Ngamia-1’s column of oil is the largest oil-bearing section Tullow has found in a single well, Heavey said today. “It’s only one well in an area nearly the size of England,” he said. The London-based company has drilled the well, in Block 10BB, to 1,515 meters and plans to extend the depth to 2,700 meters.

“We are pretty confident that we can move pretty fast in Kenya if we prove up the commercial amount of oil,” Heavey told reporters. “It’s a great start.”

Separately, the CEO said that Tullow is in talks with “a few companies” about the possible sale of its assets in Pakistan and Bangladesh.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Stephen Cunningham at scunningha10@bloomberg.net

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