It was quite a task to solve this problem but worth it. I learned how to retrieve command line arguments using sys module, regex to match and search for the keyword in a given string, and os to create new files and open files. I think a step further would be to allowing the user provide the list of keywords dynamically (using input function), then using those keywords against the given text file.
The next task is Regex Search according to the book and I look forward to it.
Do provide your suggestions in the comment box below.