Tullow Oil Gets 100% Stake In Kenya’s Lokichar Basin
Tullow Oil, the global independent oil and gas firm says it is to assume a 100% stake in Kenya’s South Lokichar Basin project.
On Tuesday, Tullow Kenya said it 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 those blocks will increase from 50% to 100%. The statement did not however indicate whether authorities in Nairobi have approved the deal.
According to the statement 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.
“This is a low-cost development project that has the potential to unlock material value for Kenya” reads the statement. Tullow indicated in the statement that prospective strategic partners have been informed of the notice. “They remain engaged and detailed farm-out discussions continue with a number of companies. Whilst the process has taken longer than expected, Tullow remains focused on securing a strategic partnership this year,” Tullow stated.
Tullow previously operated in Uganda’s Albertine region. Its stake in Tilenga was farmed out to Totalenergies. There have been reports that Kenyan President, William Ruto had imposed strict conditions for Tullow and Oil and Natural Gas Corporation (ONGC) By mid-May, Kenyan authorities had not approved the Field Development Plan by Tullow and ONGC.
There had been negotiations for ONGC to buy out half of the stakes that Africa Oil Corp, Tullow, and TotalEnergeies SE in the Lokichar oilfield in Kenya. The deal for blocks based in northwestern Turkana was valued at 3.4 billion dollars. Kenya’s south Lokichar fields in blocks 10BB and 13T are projected to produce 120,000 barrels of oil per day.
Tullow entered Kenya in 2010, after signing agreements with Africa Oil and Centric Energy to gain a 50% operated interest in five onshore licenses; 10BA, 10BB, 10A, 12A, and 13T. In 2012, Tullow farmed into onshore Block 12B with 50% and increased its interest in Block 12A to 65%. Tullow currently has a 50% operated interest in Blocks 10BA, 10BB, 13T and 100% in Block 12B.