PANCONTINENTAL Oil & Gas finance director Ernest Myers said the plummeting price of oil was “devastating”, but he remained confident in the opportunity in oil and gas in Africa.
Presenting at the Africa Oil and Gas forum in Perth on 10 March, Mr Myers discussed the company’s exploration in Africa, the opportunities for oil and gas in Africa and Pancontinental’s forward plan.
Speaking with Oil & Gas Australia, Mr Myers said the company was confident in the success working in Kenya and Namibia could bring to Pancontinental and found there weren’t many challenges working in Africa.
The FAR-operated Block L6 in onshore Kenya was a main focus for the company, with with Mr Myers saying a seismic program was due to start soon.
The company hoped to receive interpretation of that seismic study in October or November this year, he said.
On completion of the seismic program, the project operator would organise a rig and expects to drill the well in late 2015 or early 2016, he said.
In a statement, Pancontinental said the offshore block L10B joint venture recently secured a 12 month extension on the work commitment program from the Kenyan ministry of energy and petroleum.
“BG Group will provide what they think is the way forward in blocks 10A and 10B, so we will wait for the joint venture meeting to hear their proposal,” Mr Myers said.
Operator BG and partners PTTEP and Pancontinental drilled the Sunbird 1 well in permit L10A in offshore Kenya in 2014 and made a successful discovery.
The company said in addition to the permit’s own exploration findings via seismic and drilling, the joint venture is waiting for the drilling of Anadarko’s Mlima well in the adjacent permit L11B which will possibly provide more information on the joint venture’s work.
Work in Namibia was a key point Mr Myers focused on, he said Tullow Oil is nearing completion of the interpretation of the 2D and 3D seismic program in offshore Namibia EL0037, in the Walvis basin.
On completion of the interpretation of the seismic study, Tullow have the option to elect to drill a well, Mr Myers said.
Mr Myers said Namibia has been neglected by the oil and gas industry for a long time, but he sees the potential of working in Namibia and hopes to see further development of the industry in this region.
“We are looking selectively at new opportunities and we feel well positioned,” Mr Myers said referring to exploration in Africa and the present low oil price environment.
Mr Myers said he expects service companies to cut their prices to get the work flowing again, but so far he hasn’t seen this happen.
“The impact for us is that the price of oil comes down, we have seen exploration budgets slashed and what that has done is it becomes harder to do farm outs and harder to get work programs done,” he said.
Mr Myers said low oil prices have resulted in companies being more selective in the work they do and what wells they commit to, but overall he is positive about exploration in Africa and what the company can achieve.