GLOBAL PET

News on other blocks in Lamu..Would guess the delay from CNOOC is a wait and see how the initial report from the JV of GBP/DNX etc. at Pomboo goes

China National Offshore Oil Corp. (CNOOC) is considering farming out six blocks it was awarded by the government of Kenya earlier this year. In April 2006, Chinese President Hu Jintao flew to Kenya to meet President Mwai Kibaki and conclude a deal to prospect for oil in mainly offshore areas (see Kenya: 27 April 2006: ). However, there has been little interest to start exploration activities, which has disappointed the National Oil Co. of Kenya (NOCK). CNOOC has interests in three basins (Lamu, Anza, and Mandera), with a total area of 115,343 sq. km, but only one production-sharing contract was signed, for Block L4, while the other interests (in Blocks 1, 9, 10A, L2, and L3) are only one-year technical-study agreements. Separately, Origin Energy has started shooting 2D seismic data over Blocks L8 and L9, which cover 3,200 km in the Lamu basin; the company has an option to extend the survey by another 600 km.

By paying the US$4 million cost of shooting the seismic data, Origin is earning up to 75% in Blocks L8 and L9 and must drill an exploration well in each block..Significance: CNOOC‘s delay is a blow to Kenyan government, which was hoping that the Chinese would be encouraged by the activity in the Kenya's offshore waters and start prospecting for oil in the near future. Drilling began earlier this month off the Kenyan coast in the deepwaters of Lamu when Australia's Woodside Petroleum spudded the Pomboo-1 exploration well in deepwater Block L5 (see Kenya: 5 December 2006:).