Tullow Oil Bills Kenya Sh204bn For The Turkana Oil Project

In a shocking turn of events, British oil explorer Tullow Oil is now involved in a major dispute with Kenya over the firm’s demand for Sh204 billion as compensation for the six-year Turkana oilfields project.

The London Stock Exchange-listed firm wants the Ministry of Petroleum to show a commitment that Kenya will pay the firm $2 billion (Sh204 billion) in order to sweeten the deal as the firm looks to sell its 50pc stake in blocks 10 BA, 10 BB and 13T in the South Lokichar Basin.

The government of Kenya has, however, rejected Tullow’s compensation bill, arguing it is extremely excessive and not justified.

“We have written back to them demanding for justification on the $2 billion dollars’ bill. Our own audit points to a lower figure,” a top official at the Petroleum ministry told journalists. “Tullow is in serious need of cash and they are rejecting the government’s position that the compensation bill is lower.”

Should Kenya and Tullow lack common ground, the two might be forced to seek arbitration in the United Kingdom in line with the crude oil exploration contract.

Tullow has been on a downhill slope financially in recent months, the firm’s financial constraints have even seen the firm plan to cut a third of its staff after being hit by weak output in Ghana and delays in East Africa.