The National Oil Corporation of Kenya (NOC) has revived the search for a strategic partner, to fund its oil and gas exploration in its Block 14T located in the Lake Magadi Basin.
NOC last week moved to hire a consultant who will be charged with helping the company package the data it has gathered so far about the oil block to entice potential partners.
The consultant will “support further exploration initiatives in Block 14T, support data packaging and marketing in Block 14T with aim of securing a partner,” said the company in a disclosure.
Its previous attempts to secure a partner for the project, the most recent being in 2019, failed to yield fruit. Block 14T is just south of Blocks 10BB and 13T where commercial discoveries of oil have been made.
The Block covers an area of more than 7,000 square kilometres and runs to the border with Tanzania.
NOC is also seeking to drill a stratigraphic well in the block. A stratigraphic well is drilled to gather information about the nature of an oil block with no intent to produce oil or gas from such a well.
The corporation signed a production-sharing contract with the government for Block 14T in November 2010 which became effective in February 2011 for an initial exploration period of three years.
The contract has since been extended several times with the latest extension to February 14, 2023, according to Auditor-General Nancy Gathungu.
Ms Gathungu said that by June 30, 2021, NOC had spent Sh2.42 billion on exploration activities in the block, underlining the huge expenditure required to fund those activities.
NOC is mired in financial difficulties, even as it struggles to repay a Sh6.35 billion loan facility from KCB and another loan of Sh2.21 billion from Stanbic Bank.
The company says it has not taken new loans since 2019, but the existing loans are growing rapidly as interest and penalties accumulate.
The company made a loss of Sh969.79 million in the year to June 2021, up from Sh494.5 million in the previous year, this pushed its accumulated losses to Sh4.02 billion, up from Sh3.05 billion. The Cabinet in August approved the split of the company into three entities to support its revival.
It was split into NOC Upstream Limited, NOC Downstream Limited and NOC Trading Limited with each of the three, handed distinct mandates.
Credit: Source link