One of the partners near a major new hydrocarbon discovery offshore Kenya has signalled an extension to an adjacent deepwater exploration block and plans to increase its equity in the region.

Australia’s Pancontinental Oil and Gas has been given another 12 months by the Kenyan government to evaluate the hydrocarbon potential in Block L10B, which lies immediately south of Block L10A where operator BG Group announced the Sunbird-1 oil and gas discovery earlier this year.

Pancontinental has been granted a 12-month extension to an initial exploration period for the L10B license area. After that, the company and its partners including operator BG Group can then elect to continue with a First Additional Exploration Period.

Describing the extension as “extremely favourable,” Pancontinental says the decision provides more time to assess the impact of the Sunbird-1 discovery in adjacent block L10A, where the company already holds 18.75%, equity, and the implications of the discovery on possible future drilling in L10B. With the extra time Pancontinental says it will look for a farm-in partner for exploration drilling in L10B.

At the same time the independent has said it will increase its equity in the block from 15% to 20% following the decision of Premier Oil to withdraw from the license.

Pancontinental says L10B has a number of large prospects and leads identified using 3-D seismic: “These are being examined as potential exploration drilling targets,” the company stated.

Back in March BG revealed that Sunbird-1 encountered a gross hydrocarbon column of 44 m (144 ft) in a Miocene reef formation at 1,584 m (5,195 ft) subsea, after the well was drilled in a water depth of 723 m (2,371 ft).

Offshore