Africa Oil Corp and Total Energies have exited Kenya’s oil exploration project in Turkana, leaving Tullow Oil to assume a 100 per cent equity position.

In a statement, Tullow Kenya BV Managing Director Madhan Srinivasan disclosed that the firm is engaging strategic partners who have expressed an interest in the project based on its economic viability.

“Project Oil Kenya is a low-cost development project that has the potential to unlock material value. Prospective strategic partners remain engaged, and detailed farm-out discussions continue with a number of companies,” Srinivasan said.

The two companies have withdrawn from blocks 10BB, 13T and 10BA in the South Lokichar Basin for differing internal strategic reasons.

“As a result, Tullow’s working interest in these blocks will increase from 50% to 100%. 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,” Srinivasan said.

Following the withdrawal of the minority partners, Tullow’s net Project 2C contingent resources are expected to increase from 231 mmboe to 461 mmboe, taking the Group’s total contingent resources from 605 mmboe to 836 mmboe. Net capex guidance for 2023 in Kenya will increase from c.$10 million to c.$15 million, less than 5% of Group capex.

Mmboe is the unit for million barrels of oil equivalent per day.

Budgetary allocation to the Turkana project

The national government has allocated Ksh651.2 million for the State Department for Petroleum geared at advancing Project Oil Kenya for the year 2023/2024.

“In the medium-term 2023/24-2025/26, the State Department has prioritized programs and sub-programs intended to provide policy, the legal and institutional framework for exploration, development, production, and commercialization and ensure the security of supply of oil and gas products for sustainable development. In this regard, the State Department will finalize the Field Development Plan for the South Lokichar Oil field; review, demarcate and gazette a new Block Map in view of the anticipated bid rounds during the period; construct a water pipeline from Turkwel to the South Lokichar Oil field,” the 2023 Financial Bill, which is in Parliament, reads in part.