Kenya to benefit from Tullow’s Ksh.37 bn investment kitty in 4 African states
The Anglo-English based oil explorer – Tullow Oil – has laid down strategy to continue with its investment plan in four African countries, including Kenya.
In a statement to newsrooms Wednesday, the company said it is investing Ksh.1.2 billion in the country.
It said it has held discussions with the Energy Petroleum and Regulatory Authority (EPRA) and the Petroleum Ministry to finalise on the Field Development Plan (FDP).
“In parallel, Tullow and its JV Partners are working with the Energy and Petroleum Regulatory Commission Authority (EPRA) and the Ministry of Energy and Petroleum to finalise the FDP,” said Tullow in a statement.
In September 2020, the oil explorer made an about turn on its oil project in Kenya suspending its exit plan through the sale of blocks in the South Lokichar Basin.
Two years later, the company expressed fear that its assets in Kenya could plummet by close to Ksh.30 billion if the Government fails to grant a production license on time.
It was on the back of a production license the oil firm said the Kenyan government had delayed handing over.
“Discussions are underway with potential bidders around a range of commercial arrangements. Further steps depend on Kenya’s government decision on production license,’’ Tullow said in a statement.
Kenya had set December 2021 a deadline for Tullow to present a comprehensive investment plan for oil production in Turkana or risk losing concession on two exploration fields in the area.
In a statement on January 25, 2023, however, the company said proceeds from Early Oil Pilot Scheme (EOPS) cargo sales have been recorded as a credit against capex, resulting in a net inflow of Ksh.497 million (US$ 4 million).
The Ksh.1.2 billion plan is a fraction of Ksh.37.2 billion (US$300 million) the company has set aside for oil operations in three other countries including Ghana (Ksh.10.4 billion), Gabon (Ksh.4.9 billion) and Côte d’Ivoire (Ksh.2.4 billion).
In Côte d’Ivoire, Tullow has leveraged its differentiated understanding of the Tano Basin to secure a 90 percent interest in a new offshore exploration licence (CI-803) which, along with the Tullow operated CI-524 licence, provides Tullow with a strategic position in an area adjacent to the Group’s producing fields in Ghana.
In Gabon, Tullow continues to focus on selective infrastructure-led exploration (ILX) activities to underpin production.
Total capital expenditure is expected to be Ksh.4.9 billion ($40 million) of which 75 percent will be allocated to infrastructure projects to support future development and production.
Kenya is betting on the commercial exploration of the oil blocks to become a petrol-dollar state.