Tullow Oil, the company leading oil exploration operations in Lokichar Oil Basin in Turkana, has announced plan to lay off some of its staff in a bid to cut costs.
In a memo to all staff members dated Wednesday, January 5, Martin Mbogo, the Tullow Managing Director, stated that the company’s current performance has made it impossible for it to sustain its human resource wage bill, hence, need to restructure its workforce.
“The Company has had to review and assess its financial performance and business operations to ensure resources are allocated in the most efficient way possible and to ensure that the current structure of Tullow meeting the demands of the business effectively, ” the memo reads in part.
“Due to this review it has become necessary to restructure the company with some roles becoming unnecessary.”
The job cuts, according to Mbogo, will be carried out at all levels and cadres of the organization.
Read: Tullow Oil Mulls Exiting Kenya Over Uncertain Future
Some of the employees who will be affected include expatriates, Kenyan nationals in contracts, fixed, and permanent terms.
Mbogo indicated that the firm has already notified the respective Labour Officers of the intended layoff.
He, however, pointed out the company is open to consultations with the employees “in an effort to explore any measures that can be taken to mitigate the effects of the redundancy. ”
The firm affirmed that the intended job cuts will be implemented in accordance with the Employment Act and employee contracts.
“Accordingly, the Company will pay all the affected employees a redundancy package comprising of the employ… salaries up to the date of termination, their redundancy severance dues, their termination notice or, in lieu of notice pursuant to the terms of the affected Employees’ employment contract and any accrued but untaken leave, ” added Mbogo.
Read Also: Not Now, It’s 2024: Tullow Pushes Kenya’s Full Commercial Oil Export Date
The development comes just days after word went round that the company, which is a partner with the Kenyan government in the extraction and exportation of the oil, is mulling exiting operations in the country over uncertain future — mixed fortunes in the market.
Reports by Reuters indicate that the in conjunction with Total has hired French bank Natixis to run the joint sale process for blocks 10BA, 10BB and 13 T in the South Lokichar Basin.
Read Also: Tullow Oil Resumes Turkana Oil Exploration After Agreement With Government
Last year Tullow announced that it was willing to sell up to 20 percent of its 50 percent stake in the blocks. Reuters reports that the company is now willing to sell the entire stake after disappointing exploration results in Guyana and production problems in Ghana. The project is valued at between $1.25 billion to $2 billion (approximately Ksh125 billion to Ksh200 billion).
The fields already produce about 2,000 barrels of oil per day as part of an early production system. In August last year, the company announced that it had exported its first cargo of 250,000 barrels.
Oil in Turkana was discovered in 2012, and it is estimated that the oil fields contain 560 million barrels in proven and probable reserves. Upon full exploration, miners can produce up to 100,000 barrels per day from 2022.
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