What Tullow’s Exit Means For Kenya’s Oil Project

Tullow Oil recently put up its stakes in Kenya’s first oil development , sources said the firm was selling their entire 50 pc stake. This has raised eyebrows over the future of the country’s future oil exploits.

The government insists kenyans will see a positive outcome from its Early Oil Pilot Scheme (EOPS) with the Anglo-Irish firm expected to deliver its final investment decision (FID) sometime later this year.

Kenya will be looking at a new operator on its crude developments after Tullow sells its stake in the project, “It changes the whole outlook for the Kenyan project. This is an adjustment to the entire national outlook,” Platform for Oil and Gas Coordinator Charles Wanguhu told journalists.

News about the potential exit spell doom to Project Oil Kenya, Wanguhu, however, said the quest for petrol-dollars by Kenya may not have entirely sunk as the sale presents the potential entry of a larger player. “It’s not all doom and gloom yet. You are looking at a majority shareholding on offer as both Tullow and Total puts up their stakes for sale together. As such, this is one solid block which would be attractive to a bigger investor,” he said.

The said entry of a larger player in the Project Oil Kenya operator may lead to an even more efficient development project by optimizing scale efficiencies and leveraging on easier decision making from the reduction in shareholding.

The China National Chemical Corporation (ChemChina) which owns the ChemChina UK Limited, the subsidiary which made the purchase of Kenya first batch of crude in August,  the China Petroleum and Chemical Corporation (Sinopec), the Royal Dutch Shell and ExxonMobil are firms that have been considered to take over.