Nairobi — Total and Africa Oil have quit Project Oil Kenya in Turkana County.
Tullow Oil plc, a global independent oil and gas exploration and production firm, will now fully acquire the project.
The 100 percent equity takeover is now awaiting approval from the government.
Tullow Kenya BV Managing Director Madhan Srinivasan disclosed that the firm is engaging strategic partners who have expressed an interest in the project based on its economic viability.
“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.
A communiqué from Tullow indicated that the firm has been informed by its two minority partners of their intention to issue notices of withdrawal from blocks 10BB, 13T, and 10BA in the South Lokichar Basin for differing 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.
He said the project progress continues, and the updated Field Development Plan (FDP) was submitted to the Kenyan regulator, Energy and Petroleum Regulatory Authority (EPRA), in March 2023 and is now under review by EPRA.
Tullow stated that it will continue to work with the government of Kenya and EPRA to get the FDP approved.
Following the withdrawal of the minority partners, Tullow’s net Project 2C contingent resources are expected to increase from 231 mmboe to 461 mmboe, taking the group’s total contingent resources from 605 mmboe to 836 mmboe.
“Whilst introducing strategic partners has taken longer than expected, Tullow remains focused on securing strategic partners this year.” the Tullow communique noted.
The Programme Based Budget of the National Government of Kenya for the year ending June 30, 2024, published last month by the National Treasury, indicates a Sh651.2 million budgetary allocation for the State Department for Petroleum geared at advancing Project Oil Kenya.
The document also indicated that finalizing the FDP process is a high priority within the programme.