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Pancontinental says first oil discovered offshore Kenya

17 June 2014

Australia-based Pancontinental Oil and Gas NL says it has verified that its recently completed Sunbird-1 well off the southern Kenyan coast has intersected an oil column—the first such discovered off the East African coast. The gross oil column is assessed to be 14m thick beneath a gross gas column of 29.6m in a reefal limestone reservoir in the Sunbird Miocene Pinnacle Reef in area L10A.

The Sunbird-1 oil is the historic first-ever oil discovery offshore Kenya. Furthermore, it is the only offshore oil column ever reported seaward of the eastern coastal margin of the African continent, from South Africa to the north- west tip of Somalia. We believe that this is a play- opening discovery in Kenya’s Lamu Basin. Because of the Sunbird discovery we expect to see a significant increase in industry interest offshore Kenya.

—Barry Rushworth, Pancontinental’s CEO

Kenya
Location map. Industry exploration activity has been moving north from Mozambique and Tanzania. Click to enlarge.

The corresponding net values are 9.2m for the oil zone and 28.3 m for the gas zone. The Sunbird Reef is an ancient Miocene pinnacle reef buried beneath approximately 900m of younger sediment. The top of the Sunbird Miocene Pinnacle Reef was reached at 1,583.7m sub-sea. The water depth is 723m.

Pancontinental believes the results are significant because they are the first proof of the presence a prospective oil system in the Lamu Basin offshore Kenya. The oil and gas have been geochemically typed in detail and the prospective source rocks have been dated and characterized for use in future exploration.

The company said that analysis of the Sunbird results has been complicated by the loss of drilling mud, seawater and remedial cement pumped into the limestone reservoir during drilling operations; the reservoir zone was heavily flushed during well control operations, making determination of the oil and gas zones difficult. The presence of oil is supported by geochemical analysis of MDT samples, the pressure gradient of MDT samples, numerical modeling of the invasion of the oil zone and also fluorescence attributable to oil in samples.

Pancontinental has an 18.75% interest in the well and block L10A. Pancontinental has three extensive exploration areas in this highly prospective Basin covering a total area of approximately 15,000 sq km, including L10A.

The Operator of the Block L10A Petroleum Sharing Contract, BG Group, is continuing to analyze the well data and will recommend a future exploration program using the well results.

Sunbird-1 was “plugged and abandoned” in accordance with the drilling program. These measures are intended to ensure that there is no leakage of oil or gas within the well or to the sea floor.

The L10A joint venture is considering the details of follow-up exploration activities after the Sunbird-1 oil discovery.

The Sunbird discovery has yielded details of the oil system in the Lamu Basin, that are held confidential by the L10A joint venture, including the age and depositional environment of the source rock and the timing of the generation of the oil phase.

The Kenya L10A consortium consists of: operator BG Group with 50%; PTTEP with 31.25%; and Pancontinental with 18.75%. Pancontinental advises that it has increased its interest in licence L10B, immediately to the south of L10A. The increase in interest is subject to the completion of documentation; however Ministerial approval has already been given.

The Kenya L10B consortium now consists of BG Group with 75.00% and Pancontinental with 25.00%.

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