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Tullow Makes Kenya’s First Oil Discovery in ‘Major Breakthrough’

March 26, 2012

“This is the first time Kenya has made such a discovery and it is very good news for our country,” President Mwai Kibaki said in a statement e-mailed by the presidency in Nairobi. “It is however the beginning of a long road to make our country an oil producer.”

The results open up a new basin in East Africa as Tullow embarks upon a multi-well drilling campaign that will also encompass Ethiopia. It’s aiming for at least 300 million barrels of oil with its first two sites in an underdeveloped area from Kenya to Ethiopia, a plot almost the size of England.

“This oil has similar properties to the light waxy crude discovered in Uganda,” Tullow said. “Following this discovery the outlook for further success has been significantly improved.”

Tullow rose as much as 4.1 percent and traded at 1,534 pence as of 1:03 p.m. in London.

Kenya has no proven oil reserves. Exxon Mobil Corp. and Chevron Corp. found gas in the Anza Basin in 1976. Tanzania to the south produces gas from two offshore deposits for domestic power generation, and neighboring South Sudan is sub-Saharan Africa’s third-biggest oil producer, after Angola and Nigeria.

Tullow and Africa Oil hired China’s BGP Inc. to survey the South Omo Block in the Omo River Delta in Ethiopia, the area where Richard Leakey and a team of paleontologists discovered in 1967 the oldest remains of Homo sapiens known to science.

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