Tullow Oil plc, a global independent oil and gas exploration and production firm, has acquired full control of Project Oil Kenya in Turkana County. This takeover comes after the withdrawal of Tullow’s two joint venture partners, Africa Oil Corp and TotalEnergies, from the project.
Tullow Oil will now hold a 100% equity position in Project Oil Kenya, pending approvals from the Government.
Madhan Srinivasan, the Managing Director of Tullow Kenya BV, emphasized the firm’s dedication to advancing the development of the South Lokichar basin project. Srinivasan revealed that Tullow is engaging with strategic partners who have shown interest in the project due to its economic viability.
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“Project Oil Kenya is a low-cost development project that has the potential to unlock material value. Prospective strategic partners remain engaged, and detailed farm-out discussions continue with a number of companies,” stated Srinivasan.
Tullow Oil announced in a statement that it had received notices of withdrawal from blocks 10BB, 13T, and 10BA in the South Lokichar Basin from its two minority partners, each for distinct internal strategic reasons. As a result, Tullow’s working interest in these blocks will increase from 50% to 100%.
Srinivasan highlighted the advantages of owning 100% of the project, including increased optionality, flexibility in securing strategic partners, simplified joint venture partnerships, and streamlined project delivery.
Tullow said the project’s progress remains steady, with an updated Field Development Plan (FDP) submitted to the Kenyan regulator, Energy and Petroleum Regulatory Authority (EPRA), in March 2023. The FDP is currently under review by EPRA, and Tullow will continue working closely with the Government of Kenya and EPRA to obtain approval.
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Following the withdrawal of its minority partners, Tullow Oil’s net Project 2C contingent resources are expected to increase from 231 million barrels of oil equivalent (mmboe) to 461 mmboe. This will bring the company’s total contingent resources from 605 mmboe to 836 mmboe. Net capital expenditure (capex) guidance for 2023 in Kenya will rise from approximately US$10 million to around US$15 million, which represents less than 5% of the Group’s total capex.
Tullow Oil has informed its prospective strategic partners about these equity developments, and discussions regarding detailed farm-out agreements are ongoing.
“While introducing strategic partners has taken longer than expected, Tullow remains focused on securing strategic partners this year,” stated the Tullow communique.
