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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Barclays Bank confirm U.S. $ 13 million
dollars Kenya oil drilling finance deal

NAIROBI (Xinhua) -- Barclays Bank of Kenya have confirmed signing a U.S. $ 13 million dollars financing deal with Marriott Drilling Africa Limited (MDAL), an oil drilling company, to begin oil exploration in the East African nation.

Barclays Managing Director, Jeremy Awori said the strategic move in the oil industry will enable MDAL to acquire a drilling and workover oil rig to be deployed in exploration in Kenya.

"Signing a financing agreement of this value reflects the ability and commitment of Barclays Bank to shoulder its responsibilities in financing the projects of leading companies which have a clear strategy," Awori said in a statement.

"It is also aligned to our strategy of making Barclays the ‘Go- To Bank’ for asset financing solutions in the market," Awori said.

Kenya and the entire East African region have witnessed intensified exploratory activity since 2003, which led to the discoveries of oil and gas in Uganda and Tanzania. There is also ongoing exploration in Ethiopia.

The East African nation has drilled 31 dry wells in Isiolo, northeastern Kenya and Lamu (Southeast), and has lost a lot of money.

Officials said the discovery of the commercial quantities of oil in Turkana, one of the poorest communities, should also ignite new investments in the economy of Turkana.

Kenya has never made any substantive commercial oil discoveries despite ongoing oil exploration that started in the East African nation in the early 1930s and later picked off in the 1950s.

Oil exploration blocks in the semi-desert areas of Mandera in northern Kenya were largely abandoned after explorers failed to discover commercial quantities of oil in the northern frontier.

Speaking on the new deal, Awori termed it an extremely significant transaction that highlights the bank’s commitment towards the growth of the Kenya’s economy.

Apart from financing the rig acquisition process, Barclays will arrange and execute the five-year financing plan in a timely move that aims to position financial intermediaries’ stake in the oil industry as focus shifts on Kenya as a potential oil producing country in the next decade.

Marriott Drilling Africa Limited’s Managing Director Jonathan Hobday said the deal was in line with its ambitious growth strategy to increase its rig fleet by adding state-of-the-art equipment where opportunities arise.

"Today marks the start of a new era for us in East Africa.

"We believe that banks have a responsibility to assist companies like Marriott in the development of oil resources in Kenya and elsewhere in East Africa.

This financing agreement with Barclay is a catalyst to spur our business," said Hobday.

           

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