Tullow Oil, the company leading oil exploration operations in Lokichar Oil Basin in Turkana, is mulling exiting operations in the country over uncertain future.
According to reports by Reuters, the company in conjunction with Total have hired French bank Natixis to run the joint sale process for blocks 10BA, 10BB and 13 T in the South Lokichar Basin.
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).
Read: Not Now, It’s 2024: Tullow Pushes Kenya’s Full Commercial Oil Export Date
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.
Early this month, the company wrote off $800 million (Ksh80 billion) of its exploration costs in Kenya and Uganda after lowering its forecast for long-term crude oil prices.
“Exploration costs written off are predominately driven by a write-down of the value of the Kenya and Uganda assets due to a reduction in the group’s long-term accounting oil price assumption from $75 per barrel to $65 per barrel,” Tullow said in a trading update.
The multinational has spent more than $1 billion in exploration and oilfield development in Kenya.
Tullow says it has suspended Kenya’s early oil export scheme due to severe damage to roads caused by heavy rains in the fourth quarter of last year.
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