Kenya kept in the dark on Gas Discovery

Kenyan authorities are angry with multinational oil and gas explorers who make major announcements of discovery of the hydrocarbons before informing the ministry of energy as outlined in their prospecting licenses as filing of returns. A ministry official said the announcement by Australia's Pancontinental Oil & Gas Company that natural gas had been found in Mbawa1 well was not communicated to the Kenya government.

This becomes the first natural gas discovery in Kenyan territory. A series of recent discoveries offshore Tanzania and Mozambique have raised interest among world's oil and gas exploration majors in the previously ignored East African region. Last month, the U.S. Geological Survey estimated that over 250 trillion cubic feet, or 7.1 trillion cubic metres of natural gas may lie off Kenya, Tanzania and Mozambique, compared with 186 trillion cubic feet for Nigeria, Africa's biggest energy producer.

The company holds 15 percent share of the license for the block L8 prospect where the Mbawa1 well is located 70 kilometers off the Malindi coast. Pancontinental had the previous day requested Australia's securities exchange to halt trading of its shares to await a major announcement, which turned out to be the natural gas discovery in Kenya.

The announcement of Tullow oil's discovery of oil in Turkana at Nagmia well was also leaked to the foreign media outlets before the returns were filled with the ministry of energy.