After the withdrawal of the Africa Oil and Total Energies, Tullow Oil’s subsidiary Tullow Kenya will increase its operating stake of 50% in Blocks 10BB, 13T, and 10BA that make up the multi-billion-dollar Kenyan oil project in the South Lokichar Basin to 100%
Tullow Oil said that its two joint venture partners Africa Oil and Total Energies are pulling out from the onshore South Lokichar oil project in Kenya for different internal strategic reasons.
The UK-based Tullow Oil said that it has been informed by the two partners about their intention to issue notices of withdrawal from the onshore oil project, which is also known as Project Oil Kenya.
As a result, Tullow Oil’s subsidiary Tullow Kenya will increase its operating stake of 50% in Blocks 10BB, 13T, and 10BA in the South Lokichar Basin to 100%.
Africa Oil said that it has submitted notices to the Kenyan Ministry of Energy and Petroleum seeking the consent of the government to transfer all its rights and obligations under the production sharing contracts (PSCs) to its remaining joint venture partner.
The Canadian oil and gas firm revealed that the carrying value of the intangible exploration assets in Kenya was written down to $58.6m at 31 December 2022. Africa Oil intends to additionally impair the value to zero.
Africa Oil president and CEO Keith Hill commented: “We have taken the decision to exit our Kenya concessions as our strategy has shifted to focus on production and high potential exploration opportunities, including our Orange Basin portfolio where we are now appraising the exciting Venus discovery, offshore Namibia.
“Africa Oil is proud to have played a central role in discovering the oil fields in Kenya’s South Lokichar Basin. We continue to believe these discoveries will form the basis of a significant oil producing province in the coming years with strategic value for the country.”
Tullow Oil said that its board considers that full ownership of the South Lokichar project provides more optionality and more flexibility in the ongoing process to get strategic partners. It also paves the way for a simpler joint venture partnership, while streamlining project delivery, said Tullow Oil.
The South Lokichar project spans around 1,085ha in the Turkana County in north-west Kenya. It involves the development of the Amosing, Ngamia and Twiga fields among others that are projected to have up to 560 million barrels of oil resources in place.
In March 2023, an updated field development plan (FDP) for the South Lokichar oil project was submitted to the Kenyan Energy and Petroleum Regulatory Authority (EPRA). Tullow Oil said that it will continue to working with the Kenyan government and EPRA to get approval of the FDP.