Tullow plans Sh1.6bn annual spending on Kenya oil mission

Tullow Oil tanks at its Turkana area. FILE PHOTO | NMG

Tullow Oil plans to retain its annual spending on Kenya’s oil mission at Sh1.6 billion ($10 million), pointing to a sustained curiosity within the mission that has dragged on for years for the reason that discovery was made in 2012.

The British oil explorer within the newest buying and selling replace stated it plans to trim its general capital spending throughout international locations it has a presence in from $380 million (Sh61.95 billion) to $250 million (Sh40.76 billion) because it takes a drilling break in Ghana.

Kenya’s finances for this 12 months is similar as that spent final 12 months and might be equal to 4 p.c of Tullow’s deliberate general capital spending.

Tullow will in March formally subject the full-year buying and selling outcomes, during which it’s anticipated to present additional particulars on the progress of Kenya’s oil mission. The mission has suffered a number of setbacks, delaying key selections.

Learn: Why Whole and Africa Oil deserted Kenya’s oil mission

TotalEnergies and Africa Oil Corp, who held a 25 p.c stake every in mission oil Kenya, pulled out in Could final 12 months, over what was defined as “differing inner strategic causes,” leaving the London-listed agency alone within the oilfields.

The withdrawal of the 2 companies left Tullow as the only real companion within the mission, a improvement it stated created a extra versatile proposition for a strategic partnership. Tullow stated it was persevering with with discussions with a number of events.

There has additionally been a delay in getting approval on its ultimate area improvement plan (FDP)—a doc that outlines how Tullow intends to develop the oil fields, forecasts for manufacturing and prices, in addition to the way it plans to handle the impression of the mission on the atmosphere and society

Tullow had along with TotalEnergies and Africa Oil Corp, in March final 12 months, submitted the plan for approval to the Vitality Ministry and the Vitality and Petroleum Regulatory Authority, earlier than the 2 companions pulled out.

The plan was based mostly on a lifetime of area useful resource of 585 million barrels gross, preliminary plateau manufacturing of 120,000 barrels of oil per day, and capital funding of $3.4 billion (Sh554.3 billion) for the primary oil.

Learn: Whole, Africa Oil Kenya exits spook traders

Tullow was anticipating the approval course of, together with ratification by Parliament, to conclude final 12 months however this didn’t occur, at the same time as its two companions pulled out.

The agency stated the exit of two companions led to a re-assessment of dangers related to reaching a ultimate funding resolution, leading to a $9 million (Sh1.47 billion) impairment.

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