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Friday, September 25, 2020
Tullow Oil will undertake a six-month review of the viability of its operations in Kenya after a planned sale of its stake in the project fell through, according to a Bloomberg report,
Tullow owns a 50% operated interest in blocks 10BB and 13T in South Lokichar Basin where the company discovered about 1 billion barrels of crude in 2012. Africa Oil Corp. and Total each hold a 25% stake in the project. Tullow had planned to farm down its stake in the project to around 30% in the first half of this year.
In April, Tullow announced that it had agreed the sale of its assets in Uganda to Total and that CNOOC had rights of pre-emption to acquire 50% of these assets on the same terms and conditions as Total. CNOOC later informed Tullow and Total that it had elected not to exercise its pre-emption rights and the transaction was expected to complete in H2 2020.
This was followed by the May announcement that it would declare force majeure on its Turkana oil development and hopes for a final investment decision in 2020 were considerably dimmed. FID had previously been pushed back from 2019 to 2020.
Currently, the company says it aims to submit a “technically and commercially sound” field development plan to the government of Kenya by the end of 2021, according to Madhan Srinivasan, Tullow’s managing director for Kenya.
The project’s joint-venture partners are reviewing “the development concept to ensure that the Kenya project is robust at low oil prices,” Srinivasan said in emailed response to Bloomberg questions.
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