Executive Q&A – Independent Oil & Gas Focus
Executive Q&A with Alec Robinson, CEO, Lion Petroleum Corp. By Drake Lawhead
Lion Petroleum is a privately owned company based in London with 9.7m acres in two blocks onshore Kenya. Alec Robinson, the CEO, talks to Drake Lawhead of The Oil Council.
There was a time not long ago where I might have started by asking ‘why Kenya’? But it’s no secret that East Africa is undergoing a boom in E&P. However, can you briefly describe for us the theory behind your focus on Kenya and what kind of opportunity you’re pursuing there?
As you say, the East African region has become an international hot spot for oil and gas exploration and the recent major gas discoveries offshore Mozambique and Tanzania have led to a significant increase in exploration activity. Kenya is clearly under-explored with only 28 exploration wells drilled onshore Kenya to date, one every 20,000 sq km on average, and only one well since 1992. Our team has long been involved in Kenya with our key success being the identification of the potential of Block 10BA in our Centric days which saw us, at the time, attracting Tullow as a partner. Now through Lion, we are currently engaged in moving our assets, Block 1 and Block 2B to the next exploration phase and evaluating other opportunities we have in the pipeline. Our blocks are in basins where there have been encouraging oil and gas shows, oil seeps, and where there are untested plays. We are very excited by the opportunities that we have.
Can you briefly describe for us the business model Lion is based on? Is this Centric Energy - part two?
Lion’s business model is to build and create shareholder value through leading exploration in Africa by leveraging our relationships and our first-mover advantage. The sale of Centric was a very good deal for our shareholders. We like to think that as a team, we draw on our networks and experience gained through Centric and aim to deliver the same success for our investors in the region. We already knew Lion Petroleum and its assets so when we were offered the opportunity to manage Lion and take it public, and grow the company, we were very pleased to accept. The intention is to complete the listing and then grow the company focusing on sub-Saharan Africa.
How would you describe the risk environment of operating in Kenya – is it mainly political, operational, environmental, or something else? How significant is risk planning in your business?
Over the past few years, political risk in Kenya has seemed low. At the present time, however, with an election coming up sometime in the next 12 months, political sensitivities are increasing. As political parties seek to gain advantage over each other, the high profile of the oil exploration industry means that it is at risk of being a target. With regards to security, there is natural concern about the situation in light of the recent incursion of Kenyan armed forces into neighbouring areas of Somalia. Companies active in north-eastern Kenya are monitoring the security situation very closely. A number of countries, including the UK, USA and Canada, have posted warnings regarding the risks of travel in north-eastern Kenya.
There are a lot of big companies in East Africa such as Shell, Total, ENI, Anadarko, Tullow, but also a lot of smaller players like Lion. We’ve seen some M&A activity in 2011, what are your expectations for 2012?
French multinational Total joined the jostle for opportunities recently in Kenya; that signals entrance of super- majors into the region. This is very exciting for companies like Lion, smaller players that can benefit from building rewarding partnerships with larger companies who have the operational resources to move things forward. I expect consolidation to continue driven by the need to access funds, the increasing rarity of prospective new acreage, and of course by successful exploration results.
Drillers and Dealers :::
::: February 2012 Edition
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