14th Jul 2014 10:12
LONDON (Alliance News) - Tullow Oil PLC Monday said the Gardim-1 exploration well at its Chew Bahir Basin in Ethiopia has failed to find commercial levels of oil, adding to questions over the viability of drilling for oil in the country.
The FTSE 100 oil exploration company said the Gardim-1 well reached its total depth of 2,468 metres and found minor gas shows but no commercial levels of oil.
As a result, the well will now be plugged and abandoned, with its rig being demobilised while results are integrated into its regional basin model.
"Whilst our analysis continues, initial indications suggest that the targeted seismic anomalies related to lavas that flowed into a lake basin. Having gained valuable data, including evidence of thermogenic gas, we look forward to the next phase of our exploration campaign in Ethiopia," Exploration Director Angus McCoss said in a statement.
The company said seismic interpretation tests continue on prospectivity elsewhere in the overall South Omo licence, and the next phase of its Ethiopia exploration campaign will target those prospects.
The news joins a spate of disappointing results from recent testing in Ethiopia after the company said in May that its Shimela-1 well found only water-bearing reservoirs with trace levels of gas and it abandoned another well in the South Omo block late last year, after it proved to be dry.
Tullow is trying to find out whether oil resources it found in Kenya in 2012, the first oil discovery made in that country, extend into neighbouring Ethiopia. It said in May that over 120 leads and prospects have already been identified on seismic across Tullow?s Kenya-Ethiopia acreage.
Results from Tullow's testing in Kenya has been stronger recently, with the company announcing an oil find at the Ngamia-2 well during June which appeared to show a new fault block area, north of its previous Ngamia-1 discovery.
The company also recently announced that, due to positive exploration results in Kenya and Uganda, regional discussions are underway over the development of an East African pipeline to transport oil to Lamu on the Kenyan coast.
"East Africa is becoming a major frontier for hydrocarbon exploration," Chief Executive Aidan Heavey said at a press briefing in April. "The presidents of Uganda and Kenya have met over the development, and it is moving ahead."
Tullow Oil shares were down 0.4% to 786.50 pence late Monday morning.
By Tom McIvor; [email protected]; @TomMcIvor1
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