British oil and gas explorer Tullow Oil has confirmed commercial viability of Kenya’s oil and announced that it will start negotiations with the Government on development and production.

The company, which has been performing flow tests of the Twiga South 1 and Ngamia 1 discovery wells, on Wednesday, said that results of drilling in the Etuko prospect, which is 14 km east of Twiga South 1 in Block 10BB, confirmed new oil.

Tullow, which has been prospecting with Africa Oil, another Canadian explorer, said that results of drilling, wireline logs and samples of reservoir fluid confirmed a new oil discovery with net pay of over 40 metres in the Auwerwer and Upper Lokhone targets.

“Resources discovered to date are of a scale that the partnership will initiate discussions with the Government of Kenya and other relevant stakeholders to consider development options,” said Tullow in its half year report for the period ended July 2013.

The company, said that the Etuko prospect well was deepened into the Lower Lokhone sands and encountered an additional 50 metres of potential net oil pay which will be included in a programme of flow testing later this year, to determine their production potential.

Combined volumes are now expected to exceed the threshold for development studies to commence and that to facilitate development activities in parallel with exploration and appraisal.

“These discussions include consideration of a “start-up phase” oil production system with potential to deliver significant production rates with oil export via road or rail in advance of a full scale pipeline development,” said Tullow in the statement.

Tullow said that in February this year, an “Area of Interest” (AOI) encompassing the basin discoveries and further prospects in Blocks 13T and 10BB, was agreed upon with the Government of Kenya and that the agreement allows a multiple field approach to development of the resources while permitting the continued focus on exploration to increase the resource base while concurrently appraising discoveries.

The company said that flow tests of the Twiga South 1 and Ngamia 1 discovery wells were completed in February and July 2013 respectively and the tests resulted in the doubling of Tullow’s previous estimates of net oil pay and that Ekales 1, the next exploration well commenced drilling on July 22.