Kenya pours its coffee profits into big search for offshore oil

A group of US companies is mounting a major effort to find offshore oil in Kenya. A giant oil rig, the Apollo 1, has just arrived in Mombasa after a stormy voyage in tow from Singapore, and is to be erected along the coast at Formosa Bay near the old Arab town of Malindi.

The offshore drilling operations is timed to begin in early August in 28 meters of water, and is expected to drill down to a depth of 4,000 meters. But for the moment the rig is being held up in Mombasa port by bad weather along the coast.

The contract has been awarded by the Kenya government to the City Services Company of Tulsa, Oklahoma, which is in association with Union Oil of California and the Marathon Oil Company. A Kenya subsidiary has been set up called Kenya-Cities Service, Inc., which is controlling the operation.

The managing director, Gene E. Grogan, of Kenya-Cities Service, Inc., told the Monitor that the cost of the operation will probably work out to about $100, 000 per day. He said said geological formations at the Kenya site were not part of those in Sudan and Tanzania, the nearest gas and oil discoveries to Kenya.

"Seismic surveys undertaken at the Kenya site during the past five years indicate promising geological formations similar to those elsewhere that contain hydrocarbons," he said.

Kenya is one of the unfortunate third- world countries without oil and faced with growing oil price problems that cut hard into its balance of payments. It is spending its entire coffee- crop proceeds on oil.