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French supermajor TotalEnergies and London-listed Africa Oil have decided to withdraw from an oil project in Kenya, leaving Tullow Oil the sole owner of the blocks and potentially further complicating Kenya’s oil dream.
The two minority partners of Tullow Oil’s Kenyan subsidiary have informed Tullow of their intention to issue notices of withdrawal from Blocks 10BB, 13T, and 10BA in the South Lokichar Basin project due to “differing internal strategic reasons,” Tullow said in a statement on Tuesday.
After the withdrawal of TotalEnergies and Africa Oil, Tullow’s working interest in these blocks will increase from 50% to 100%.
The project and pipeline for oil exports are estimated to cost around $3.4 billion.
Tullow Oil and its minority partners have sought to develop the South Lokichar project for years, but Africa Oil and TotalEnergies have other priority projects at the moment.
Africa Oil President and CEO Keith Hill said, “We have taken the decision to exit our Kenya concessions as our strategy has shifted to focus on production and high potential exploration opportunities, including our Orange Basin portfolio where we are now appraising the exciting Venus discovery, offshore Namibia.”
“We continue to believe these discoveries will form the basis of a significant oil producing province in the coming years with strategic value for the country,” he added.
Tullow Oil said today it “remains focused on securing a strategic partnership this year” for the project.
India’s ONGC Videsh and Oil India Ltd are interested in buying 50% in the project, Indian outlet PTI reported on Monday, citing sources familiar with the matter. However, the Indian bid faces stiff competition from Chinese state-held giant Sinopec, which is also reportedly in talks to buy into the Kenyan oil project. Sinopec has expressed interest in the stake after the Indian companies delayed the finalizing of a deal, PTI reported.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.