Results of the exploration released by Italian energy group Eni, show that the well proved nonviable and was to be “plugged” and “abandoned,” after it failed to hit commercial oil reserves.
While production was years off even in the event of a big oil discovery, the latest results have killed Kenya’s dreams of exploiting what is believed to be huge offshore oil and gas deposits for now.
The Eni well is located approximately 170km from the coast, underneath the ocean seabed where Eni has been prospecting and drilling for oil.
Follows this from a few months ago.
- At the current crude price of $75.50 a barrel, the potential crude in the reservoir would be valued at Sh23.66 trillion ($215 billion) — equivalent to two times Kenya’s GDP — while the proven commercially viable reserves are valued at Sh4.86 trillion ($44.1 billion).
- Kenya would not, however, earn the whole amount when production starts, with a big percentage going towards production and shipping costs.
- The firm is also entitled to recover its exploration costs from the crude sales, which further eats into the country’s earnings from the commodity.