Africa Oil Corporation has announced that it has finalized the initially announced farm-out with Maersk Oil and Gas for the 10BB, 13T and 10BA blocks in Kenya.

On conclusion of the farm-out, Maersk Oil paid the company $427 million which includes $344 million of past costs incurred by Africa Oil prior to the agreed March 31, 2015, and $83 million, Maersk’s share of costs incurred between the March 31 and Dec. 31, 2015. The latter contains a carry refund of $15 million for exploration costs.

Upon confirmation of existing resources which is anticipated to occur in Q1 of this year, Africa Oil will receive extra $75 million development carry. Meanwhile, on reaching a final investment decision (FID), Maersk will be obliged to carry Africa Oil for a further amount of about $405 million if certain verges of resource growth and timing of first oil are being met.

Tullow is the operator of the blocks 10BB, 13T and 10BA with 50% while Africa Oil holds 25%, and Maersk holds a 25% interest in each of the blocks. For Kenyan Block 12A, Tullow is also the operator with 65% alongside Africa Oil with 20% interest and Marathon with 15%. While for Kenya’s Block 9, Africa Oil is the operator together with Marathon Oil with 50% interest each.

According to Energy-pedia news, Africa Oil’s farm-out of 50% interest in the Rift Basin and South Omo blocks awaits the approval of the Government of Ethiopia. Upon completion of the agreement, Africa Oil will be the operator of the Ethiopia Rift Basin Block with 25% interest alongside Maersk with 25% interest and Marathon with 50% interest. Whereas Tullow will be the operator of the South Omo Block with 50% interest while Marathon, Maersk and Africa Oil holds 20%, 15% and 15% interests respectively.

Anita Fatunji