NATIONAL OIL CORPORATION OF KENYA National Oil Corporation

NATIONAL OIL CORPORATION OF KENYA National Oil Corporation of Kenya AON Minet House, 7 th Floor Mamlaka Rd, Off Nyerere Rd P. O Box 58567 - 00200 Nairobi, Kenya Tel: +254 20 6952000 Fax: +254 20 6952300/400 E-mail: mdnock@nockenya. co. ke Website: http: //www. nockenya. co. ke

OIL AND GAS EXPLORATION OPPORTUNITIES IN KENYA

PRESENTATION OUTLINE • Kenya • National Oil Corporation of Kenya • Kenya Sedimentary Basins • Kenya Petroleum Exploration Opportunities • The Petroleum (exploration & production) Act • Why Invest in Kenya

Kenya - Location Map Africa Location : Government type: Size: Religion: East coast of Africa Democratic Rep. 582, 646 sq. km Christian 78%, Muslim 10%, Others 12%

Kenya at a Glance Capital City: Nairobi Main seaport: Mombasa National language: Kiswahili Official language: English Population: 33. 18 million (2004) Currency: (KSh. ) GDP Growth rate : 5. 0% (2006) Major GDP earners: Tourism, tea, horticulture, Coffee

National Oil Corporation of Kenya • NOCK is State-owned oil Co. established in 1981 MANDATE • Facilitate exploration and exploitation of petroleum resources on behalf of the Govern. • National data repository and an advisor to Govt on Petroleum matters • Commercial importation, distribution and exportation of petroleum products as a price stabilizer.

Kenya’s Sedimentary Basins • 4 Basin totaling 399, 519. 2 sq km • Divided into 36 blocks • Average block size is 15, 000 sq km • Lamu - 169, 121. 9 sq km • Mandera - 43, 404. 7 sq km • Anza 81, 319. 6 sq km - • Tertiary Rift - 105, 673. 8 sq km

Anza Basin • Reef structures have been mapped lower Cretaceous • Prospect type: Anticline in horst, burial hill • Reservoir rock: Bioclastic limestones • Potential reservoir thickness: 300500 metres • Source rock: Lower Cretaceous • Timing: trap formation from late cretaceous to Eocene, with hydrocarbon expulsion in tertiary

Mandera basin • Failed Permo–Carboniferous Rift system • Permo-Triassic to Tertiary in age • Sediment thickness up to 10 km • Presence of hydrocarbons supported by > 200 m thick sand impregnated with biodegraded asphalt • Potential source rock interval in Mid Jurassic-Lower Cretaceous The Permo-Triassic to lower Jurassic source rock interval was encountered in both Elgal 1 and 2 wells Porosities of over 10% in Kenya Marine origin source rock evidence from the Tarbaj oil seep analysis Six leads have been identified in the basin Source rock potential of the basin is comparable with the larger Mandera-Lugh basin in Ethiopia and Somalia • • •

Tertiary Rift Basin • Is the youngest geologically • Consists of at least 9 sub-basins • The Petroleum System of the Tertiary Rift Valley is dependant on individual sub-basins. • The basin is Oligocene to Pliocene in age • Sediment thickness ranges up to 3 km • Potential reservoirs: up to 40% porosity in sands (Loperot-1 well) • Presence of hydrocarbons supported by oil recovered in Loperot-1 ~ 29 o API • Has 4 exploration blocks with one (10 B) committed for PSC award

Tertiary Rift Basin Loperot-1 Well Source Rocks: Shale Interval: 1050 -1390 M Age: Lower Miocene Depositional Environment: Lacustrine TOC: 1 -17% RFT AT 1110. 2 M: 9. 5 litres of oil & H 2 o was recovered Characteristics: • Pour Point 450 C • Low sulphur content (0. 5%) • 29. 40 API gravity

Lamu Basin • Lies both onshore & offshore. • Formed during the separation of Madagascar from Africa • Sediments range in age from Upper Carboniferous to Recent • Sediment thickness of up to 12 km • The Tertiary section contains highly prospective source and reservoir units

Palaeogene Turbidite Play Example Late Cretaceous to Tertiary turbidite sand bodies in mid-range water depths, 500 -1800 m.

Available Data All the exploration data acquired since 1950’s well preserved Available data Includes; i. Seismic data, Aeromagnetic and gravity data available at minimal charge. ii. Core samples and drill cuttings available for analysis. iii. Petroleum exploration reports iv. Hydrocarbon potential packages

Current Exploration blocks Apache : Flow Energy : Africa Oil Corporation Vanoil Energy Afren/EAX Sohi-Gas Lamu Sohi-Gas Dodori Tullow Oil Blocks Anadarko Petroleum BG Group Dominion NOC Lion Petroleum 1 Blocks 1 Block 2 Blocks 1 Block Total leased Blocks: Total vacant Blocks: 24 12 5 Blocks 2 Blocks 1 Block 5

The Petroleum (Exploration & Production) Act, Cap 308, 1986 The Petroleum Act provides legal framework and regulates the negotiation and conclusion of Production Sharing Contracts (PSC) with potential investors. • The PSC’s are subject to negotiations and are governed by ü ü The Petroleum Act, Cap 308, 1986 The petroleum (explo & Prod) Regulations The income tax (amendments) Act Environmental management & Coordination Act 2000 NEMA

Model PSC Contracts Regulations for conducting petroleum operations • Basis for negotiations is Model Production Sharing Contract. • Companies undertaking oil exploration must be registered in Kenya. • PSC application are made for gazetted exploration blocks

Legal Framework The Petroleum Exploration and Production Act Chapter 308 regulates negotiations. Under the Act: • All Petroleum existing in its natural condition in the strata lying within Kenya is vested in the Government. ∙Authority to conduct petroleum operations is vested in the Minister responsible for Energy conducted through National Oil Corporation of Kenya or contractors.

Agreements And Permits The Government may award the following permits for oil Exploration: • Production Sharing Contracts (PSC) • Non-Exclusive Exploration permit. General terms and conditions for Petroleum Agreements Contractors are required to: • Have Financial and Technical capability. • Perform minimum amount of work during exploration periods. • Commit Minimum expenditure during exploration periods. • Supply all data acquired to the Government

Model PSC Contracts Regulations for conducting petroleum operations • Basis for negotiations is Model Production Sharing Contract. • Companies undertaking oil exploration must be registered in Kenya. • PSC application are made for gazetted exploration blocks

For Further Information Contact: : Managing Director National Oil Corporation of Kenya AON Minet Hse, Mamlaka Rd, Off Nyerere Rd P. O. Box 58567 – 00200 Nairobi, Kenya Telephone +254 20 6952000 E-mail: mdnock@nockenya. co. ke or explo@nockenya. co. ke Visit Website: http: //www. nockenya. co. ke

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