- Associated Press - Monday, March 26, 2012

NAIROBI, KenyaKenya’s president announced Monday that oil has been discovered in his East African nation for the first time.

President Mwai Kibaki cautioned that commercial viability of the oil find in the northwest Turkana District is still uncertain, but he welcomed the news, calling it “a major breakthrough.”

The London-based company doing the drilling said the find is similar to the light crude previously discovered in neighboring Uganda.

“This is the first time Kenya has made such a discovery, and it is very good news for our country,” Mr. Kibaki said of the weekend announcement. “It is, however, the beginning of a long journey to make our country an oil producer, which typically takes in excess of three years.”

Tullow Oil PLC said about 65 feet of net oil pay was discovered at a site called Ngamia-1.

Tullow’s exploration director, Angus McCoss, called the discovery an “excellent start” to Tullow’s exploration campaign in the rift basins of Kenya and Ethiopia.

“To make a good oil discovery in our first well is beyond our expectations and bodes well for the material program ahead of us,” Mr. McCoss said, adding that the firm is working with Kenya’s government and has plans for further seismic and drilling activities.

Tullow said many other prospective sites similar to Ngamia have been identified “and following this discovery the outlook for further success has been significantly improved.”

Echoing Mr. Kibaki, Tullow spokesman George Cazenove sought to stress that Kenya is only at the beginning of a long process.

He noted that oil was first discovered in Uganda in 2006 and has not yet reached the production stage.

Though Uganda will get some oil to market next year, production won’t reach full speed until 2016, he said.

“I think Uganda provides a helpful parallel,” Mr. Cazenove said. “There’s a lot more work to do before we talk about how we get this to production and how it would affect Kenya as a nation.”

“It’s a great result but must be seen in context. It’s a long-term game for sure,” he said.

Energy Minister Kiraitu Murungi was quoted by Kenya’s leading newspaper, the Daily Nation, as saying that Tullow informed him that Kenya’s oil deposits could be bigger than Uganda‘s.

Mr. Cazenove declined to directly comment on Mr. Murungi’s claim but said that Uganda’s and Kenya’s oil potential are similar.

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