Tullow Likely To Exit Kenyan Oil Project Completely

Contrary to a statement by British exploration firm Tullow Oil that it has the financial muscle to stay in Kenya late last year, new reports now show that the company has put up its stakes in Kenya’s first oil development that could see Tullow exit completely amid uncertainty over the project’s launch, banking and industry.

“Our focus remains to deliver an FID (final investment decision) in Kenya in late 2020… we are engaging the government with a view to finding an amicable solution to pending issues that have delayed FID,” Tullow Kenya Managing Director Martin Mbogo had said.

The Irish founded but London-listed firm had lost half of its market value after its shares took a nosedive on December 9, following a surprise exit of its Chief Executive Officer Paul McDade, and Exploration Director Angus McCoss.

last year Tullow had indicated it intended to sell up to 20pc of its 50pc stake for Blocks 10 BA, 10 BB and 13T in the South Lokichar Basin. Sources now say Tullow together with Total, have hired French bank Natixis to run the joint sale process.The sources said it is now willing to sell the entire 50 pc stake.

French oil major Total, meanwhile, aims to sell up to half of its 25% stake in the Kenyan project.

The Kenya Development Plan for the South Lokichar Development project was targeted for late-2019 FID but is still in the negotiation stages with the Kenyan government, Tullow this month said it was still targeting FID by the end of 2020, with production starting in 2022, describing the timeline as “challenging”.

The entire project is valued at between Sh100 – Sh200 billion ($1.25 billion-$2 billion), but it is hard to be precise because the development has yet to receive a final investment decision (FID).