Canada's Africa Oil Corp said on Wednesday it had completed a farmout agreement for three east African exploration blocks to London-listed Tullow Oil Plc, which now holds a 50 percent stake in each of them.

Kenya has yet to discover any commercial oil deposits but interest in its exploration blocks has grown since neighbouring Uganda discovered billions of barrels in its Lake Albert rift, where Tullow is expected to start oil production next year.

Keith Hill, Africa Oil's President and Chief Executive Officer said in a statement the company had also signed a definitive agreement for another two blocks in Kenya.

Tullow will assume the role of operator of these blocks, said Hill. Tullow will also fund Africa Oil's working interest share of future joint venture expenditures in these blocks until the cap of $23.75 million is reached.

Africa Oil Corp. is a Canadian oil and gas exploration company with interests in exploration licenses in Kenya, Ethiopia and Somalia.

Tullow paid $9.6 million in back costs and acquisition costs for the three, Kenyan Blocks 10BB and 10A and Ethiopia's South Omo block.

The new structure leaves Africa Oil partner's Lion Petroleum with only a 10 percent stake in Block 10BB. Afren-EAX holds 20 percent of Block 10A and Agriterra has 20 percent of South Omo.

Completion of a farmout agreement for an additional two blocks in Kenya -- 12A and 13T -- is subject to government approaval expected by mid-February.

We see great synergies with the use of the technical and operational expertise they have gained in their nearby Uganda Lake Albert Graben project, Hill said.

The transaction also means that any resultant discoveries will be operated by one of the main partners in the proposed pipeline project to export crude from this highly prospective developing region.