Total and Africa Oil Quit Kenya Oil Project

Total and Africa Oil have quit Project Oil Kenya in Turkana County.

The project will now be entirely acquired by Tullow Oil plc, a multinational independent oil and gas exploration and production company.

The 100 percent equity takeover is now awaiting approval from the government.

Madhan Srinivasan, the Managing Director of Tullow Kenya BV, revealed that the company is enlisting strategic partners who have shown interest in the project due to its economic potential.

“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,” Srinivasan said, adding the firm’s commitment to progressing the development of the South Lokichar basin project.

According to a statement from Tullow, the company has been advised by its two minority partners of their intention to withdraw from South Lokichar Basin blocks 10BB, 13T, and 10BA for various internal strategic reasons.

“As a result, Tullow’s working interest in these blocks will increase from 50% to 100%. The Board considers that owning 100% of the project creates more optionality, gives Tullow more flexibility in the ongoing process to secure strategic partners, creates a simpler Joint Venture Partnership, and streamlines project delivery,” Srinivasan added.

The amended Field Development Plan (FDP), which was filed to Kenya’s regulatory body, the Energy and Petroleum Regulatory Authority (EPRA), in March 2023, is currently being reviewed by EPRA, according to him, and the project is still moving forward.

Tullow stated that it will continue to work with the government of Kenya and EPRA to get the FDP approved.

The group’s total contingent resources will rise from 605 mmboe to 836 mmboe as a result of the minority partners’ departure, increasing Tullow’s net Project 2C contingent resources from 231 mmboe to 461 mmboe.

“Whilst introducing strategic partners has taken longer than expected, Tullow remains focused on securing strategic partners this year.” the Tullow communique noted.

The National Treasury last month released the Programme Based Budget of the National Government of Kenya for the year ending June 30, 2024, and it shows a budgetary allocation of Sh651.2 million for the State Department for Petroleum targeted toward furthering Project Oil Kenya.

The document also indicated that finalizing the FDP process is a high priority within the programme.