Eni’s licenses for oil and gas exploration in Kenya expire next month

Italian oil giant Eni’s Production Sharing Contracts for exploration and development of oil and gas resources in three off-shore blocks in Kenya are set to expire next month.

Eni owns the rights to blocks L21, L23 and L24 located in the deep and ultra-deep waters of the Lamu Basin in an area of the Indian ocean where Kenya and Somalia are engaged in a bitter border dispute.

The three are part of the nine petroleum blocks that Kenya has licensed to oil exploration and rilling companies.

The others are blocks 12B, 13T, 10BA and 10BB which are owned by Tullow Oil Plc, 14T owned by the National Oil Corporation of Kenya and L19 licensed to Rift Energy Company.

Due to the border dispute, Eni had failed to undertake exploration activities in the off-shore blocks for years. It is unclear for far whether the Italian company will seek for a renewal of the licenses upon their expiry.

A Production Sharing Contract is a contractual arrangement between a government and an oil or gas exploration and production company. It is designed to govern the exploration, development, and production of hydrocarbon resources in a specific area.

According to the Ministry of Energy and Petroleum, Eni’s PSCs licenses will expire by the end of December 2024.

The licenses for blocks L21, L23 and L24 PSCs are set to expire in December 2024. No petroleum operations were on-going in the three (3) blocks following the international maritime dispute between Kenya and Somalia in the region where the blocks are situated

state department for petroleum

Eni signed the three product sharing contracts with the Kenyan government in July 2012, marking the company’s entry into Kenya.

At the time, the company announced that the initial exploration phase of the three blocks, which would be operated by Eni with 100% participation and cover an area of more than 35,000 square kilometers.

This phase would also consist of the execution of a seismic acquisition program, the Italian firm added.

The expiry of the licenses following the failure by Eni to undertake significant progress in exploration in the blocks will be a blow to Kenya whose oil and gas dream continues to dissipate.

The oil riches in the disputed part of the Indian Ocean saw Somalia take Kenya to the International Court of Justice nearly a decade ago claiming ownership of the 100,000 square kilometer triangle.

brian@theenergyreview.com