Former Masters champion Mike Weir, who is playing this event for the first time, is one stroke back at minus-6. Weir was joined in second place by Peter Hanson, Stephen Gallacher and Graeme Storm.
Retief Goosen, the 2002 winner, shares 10th place at 4-under-par 68 with eight other players. Goosen finished third here in 1998 when Tiger Woods bested Ernie Els in a playoff at Blue Canyon Country Club, which also was the host course in 1994.
Kennedy got off to a hot start with back-to-back birdies from the first. He cooled with six straight pars before a birdie on the ninth got him to minus-3.
The Australian ran off three straight birdies from the par-5 11th. That run was stopped when Kennedy bogeyed the par-3 14th. He quickly atoned for that error with a birdie on 15.
Kennedy dropped in his final birdie on the par-3 17th to get to minus-7.
'I've been working with (my coach) for about nine years now and we found a couple of keys at the start of the year,' stated Kennedy. 'My ball striking has come a long way in the last couple of years, but my short game has always been my strength and what gets you in contention. Now I feel ready to play these next four weeks in a row.'
Weir, who started on the back nine, opened by sinking an 8-foot eagle putt on the par-5 11th and quickly got to minus-3 with a birdie on 13. He wrapped bogeys at 14 and 16 around a birdie on 15 to slip back to minus-2.
The Canadian collected back-to-back birdies from the second. Weir birdied the two front-nine, par-5s six and nine to get within one of the lead.
'I've been excited about coming here for a long time. As I've got older, my plan was to play more worldwide when my kids reached an age to understand what dad was doing and were comfortable with that,' explained Weir of his reasoning for playing this event for the first time. 'When they were younger, I wanted to be around a bit more.'
Hanson and Gallacher each parred eight straight holes to open their rounds before making birdie on nine. Around the turn, they both carded five birdies and four pars to close a bogey-free round.
Storm had a hot front nine with four birdies. He jumped to minus-6 when he holed a 97-yard shot for an eagle on the short par-4 10th. Storm notched another birdie to go with a bogey over his final eight holes to share second.
Jeev Milkha Singh, who missed the cut each of the last two years at this event, carded a 5-under-par 67. He was joined in sixth by Scott Gardiner, Richard Lee and Graeme McDowell.
Among the eight players tied for 10th with Goosen are Marc Warren and Nick Dougherty. Colin Montgomerie, the 1993 runner-up, is one of eight players at minus-3.
Els, a two-time winner, opened with a 1-over-par 73 and is tied for 89th, while world No. 4 and 2005 champ Adam Scott struggled to a 74 on Thursday.