The oil company is hoping that this can help it fund development, the chief executive said.
Africa Oil and its existing partner Tullow Oil, which holds the other 50 per cent, have found more than 600 million barrels of recoverable reserves. A final decision to develop the fields is expected in the first quarter of 2016.
The discovery is part of a string of oil and gas finds stretching from Uganda and along Africa’s east coast that have made the region one of the world’s hottest untapped hydrocarbon provinces. Output could reach global markets in 2018 or 2019.
“Before project sanction in 2016, we probably would like to have a partner,” Africa Oil CEO Keith Hill told Reuters, although he said the plan was “not carved in stone” and the company could finance development itself if needed.
The Toronto- and Stockholm-listed firm aimed to reduce its stake via a so-called “farm down” deal that would leave Africa Oil with a smaller share. As payment, the new partner would reimburse costs of Africa Oil’s exploration to date and commit to pay future development costs until first production.
Asked what stake Africa Oil would keep, Hill said at the firm’s Nairobi offices: “That’ll be the biddable item. We’d love to stay in at about 25 per cent.”
“I think the window is going to be between 20 and 30 per cent,” he said of the amount the firm was likely to be able to retain. “A lot depends on how our drilling campaign goes on.”
Tullow, the operator of the Kenyan concessions, and Africa Oil plan to drill up to eight wells to open up new basins in 2015 in the search for extra reserves.
Hill said Kenya’s plans announced in September to impose a capital gains tax on energy firms, possibly as high as 37.5 per cent on foreigners, could deter new investors in Kenya. But he said he did not believe the tax would impact a “farm down” deal as there would be no recorded capital gain.
A government official has said the capital gains tax was still a subject of debate. As it stands, the law is due to be implemented from 1 January. A withholding tax that could have had an impact on the “farm down” deal is being scrapped this year.
Kenya, Uganda and other partners still have to finalise plans for a pipeline that will connect the Ugandan and Kenyan fields with the coast at a cost of about 4.5 billion US dollars.
“Every day that we wait before settling the route is a day that we add on to first oil,” Hill said. But he said the route across northern Kenya and the commercial structure were expected to be agreed by the end of the first quarter of 2015.
Hill brushed off a fall of more than 25 per cent in oil prices since the summer, saying it would not derail the project.
But he said the decline in oil prices had contributed to a drop in the firm’s share price that could make it more expensive to seek additional funds, which it might do around mid-2015.
“As far as being able to raise money in the market if we need to, we are not that concerned about it,” he said, adding Africa Oil had 350 million US dollars in cash at the end of June 2014.
Africa Oil’s shares have fallen from about 6.40 US dollars at the start of July to below 3.50 US dollars this week. As well as tracking the fall in crude prices over the period, the share price slid when Kenya announced its capital gains tax plans.