Tullow's partners withdraw from Turkana oilfields

Tullow Oil tanks at its Turkana field.  

Photo credit: File | Nation Media Group

British oil explorer Tullow has said two minority partners will withdraw in some exploration blocks in Lokichar, Turkana, leaving the London-listed firm as the sole owner of the oilfields.

In a statement on Tuesday, Tullow said the shareholders will withdraw from blocks 10BA, 10BB and 13T as the company shifts focus to finding a strategic partner.

Tullow said TotalEnergies and Africa Oil Corp, who held a 25 percent stake each, have called it quits due to "differing internal strategic reasons".

"With the strategic exit of Africa Oil Corp and Total Energies from the Project, Tullow will assume a 100 percent equity position, subject to the Government of Kenya's approvals and will continue its work with the Government and its host communities to make the region a significant energy-producing province," Tullow said in a statement.

The Turkana oil project has suffered several delays with the investors and government postponing timelines, making the future uncertain over a decade after the discovery. 

Last year, Tullow said the future of the project is dependent on the company and its partners getting a strategic investor.

Kenya had set a December 2021 deadline for Tullow to present a comprehensive investment plan for oil production in Turkana or risk losing concession on two exploration fields.

Tullow said in its financial report for the year ended December 2022 that the book value of its Kenyan assets stands at $252.6 million (Sh32.4 billion) but added that a positive outcome of its current efforts to gain a production licence and attract a new strategic investor would unlock higher valuation of the asset.

The firm, however, faces the possibility of having to write off the entire value of the asset should it fail to resolve uncertainties surrounding the project, which include finding an acceptable investment offer and government approval of the same, obtaining financing for the project and meeting government demands a viable field development plan (FDP).

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