MPs Raise Red Flags Over Tullow Oil’s Ksh15B Asset Sale to Gulf Energy

The controversial sale of Tullow Oil’s Kenyan assets to Gulf Energy has stirred strong reactions in Parliament, raising serious questions about transparency, national interest, and the future of Kenya’s oil dream.

Lawmakers now want answers. They argue the Ksh15 billion ($120 million) deal lacks clarity, ignores due process, and could derail Kenya’s oil ambitions.

With Kenya still struggling to produce and export oil commercially, MPs say the deal risks giving away key assets without protecting national interests. The fallout could damage investor confidence and widen doubts over energy sector governance.

Tullow Oil’s Asset Sale Faces Intense Scrutiny in Parliament

Tullow Oil’s decision to exit Kenya’s oil project has come under fire in the National Assembly. Lawmakers are demanding details on how the Ksh15 billion asset sale to Gulf Energy was structured, raising alarm over the deal’s impact on Kenya’s oil future.

The Energy Committee tabled a report flagging several concerns. Top on the list is the lack of information on the terms of the sale, what it means for Kenya’s commercial oil prospects, and how it will affect the still-pending Field Development Plan.

“There is limited information regarding the terms of the exit,” the committee stated, warning that the secrecy undermines Kenya’s strategic energy ambitions.

Tullow announced in April that it was quitting Kenya and selling its inland fields to Gulf Energy, a Nairobi-based oil and gas trader. This followed years of struggle to bring the Turkana oil discovery to full-scale production.

The British company is expected to receive the Ksh15 billion in instalments, starting with Ksh10.3 billion ($80 million) in 2025.

Despite walking away from a decade-long oil pursuit, Tullow retained key rights. It will still receive royalties from any future oil production and can rejoin future developments at no extra cost. MPs now say this arrangement heavily favors Tullow while leaving Kenya with little say.

Deal Threatens Kenya’s Oil Dreams and Investment Prospects

Kenya’s oil journey has faced many hurdles, but this deal, MPs argue, could derail it completely.

The Lokichar Basin in northern Kenya was once hailed as the country’s path to becoming an oil exporter. But over a decade later, commercial production is yet to start. The exit of key partners such as TotalEnergies and Africa Oil Corp. in 2023 signaled trouble, and Tullow’s departure may be the final blow.

Infrastructure remains a major problem. The country has no pipeline to move oil from Turkana to the coast, making exports difficult. Tullow’s inability to secure a strategic partner also stalled progress on the Field Development Plan, the blueprint for commercializing the oil fields.

MPs argue that selling off these assets without a plan to address those bottlenecks raises the risk of the fields sitting idle under Gulf Energy’s watch.

The deal’s structure has also left legislators uneasy. While Tullow stands to continue earning through royalties, Kenya has no clear path forward for replacing the lost technical expertise and financial muscle.

Lawmakers Demand Transparency and Strategic Review

The Energy Committee is calling on the government to publish the full terms of the sale and to ensure that all stakeholders, including the local community in Turkana, are consulted and informed.

“This is a strategic resource, and the people of Kenya must benefit. Deals done in the shadows will only lead to mistrust,” a committee member said during the debate in Parliament.

The MPs have also demanded that the Ministry of Energy give an update on the status of the Field Development Plan and explain how it intends to move forward with Gulf Energy at the helm.

So far, Gulf Energy has made no public comment on the concerns, and Tullow has insisted the deal is progressing well. However, the lack of full disclosure has deepened suspicions, especially among leaders from oil-rich Turkana County.

As things stand, Kenya’s dream of joining the ranks of oil-producing nations hangs in the balance. Parliament’s intervention may be the only hope for transparency, fairness, and protecting the country’s long-term energy interests.