ORIGIN ENERGY LTD has signed an agreement to sale to Apache Corporation 50 per cent of oil exploration interest in an offshore bloc k in Kenya.

Apache will reimburse Origin Energy of Australia $13.2 million (Sh. 1 billion) incurred in acquisition and past exploration work of block L8 north east of Mombasa town in the Lamu basin. Houston-based Apache Corporation is an oil and gas exploration and production company with operations in the US, Canada, Egypt, the UK North Sea, Australia and Argentina.

Origin’s Executive General Manager Dr Rob Willink said the sale is subject to approval by the ministry of Energy and is expected to be concluded by the end of Jun 2010. He added that they are pleased to have secured the agreement with Apache which will see the joint venture go forward and assume a commitment to drill. They also welcome Apache to bring its specialist drilling experts.

The deal is also subject to approval by Pancontinental Oil & Gas of Australia and its wholly owned subsidiary Afrex as joint venture partners. Apache will meet Origin’s costs of exploration well to be drilled on Mbawa structure.

Apache will have 50 per cent as operator, Origin 25 per cent, Afrex 15 per cent and Pancontinental 10 per cent. Willink said offshore in East Africa has become an industry focus for exploration as a result of recent deepwater gas discoveries in Tanzania and Mozambique