Tullow Oil Plc has agreed to sell its entire stake in Kenya’s oil operations to Auron Energy E&P Limited, an affiliate of Gulf Energy Ltd, for a minimum of $120 million (about Sh15.5 billion).

The transaction was executed through its subsidiary, Tullow Overseas Holdings BV.

The deal transfers full ownership of Tullow Kenya BV—the company holding Kenya assets, including approximately 463 million barrels of potential oil reserves—to Auron Energy.

Gulf Energy will guarantee Auron’s obligations, while Tullow guarantees those of the seller.

Richard Miller, Tullow’s chief financial officer and interim chief executive officer, said the deal is aligned with the company’s financial priorities.

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“We are pleased to announce the signing of the Kenyan SPA (sale and purchase agreement), marking another step closer to completion of the transaction with Gulf Energy," Miller stated.

"For a total consideration of at least $120 million, the transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totalling $80 million expected before the end of the year.”

The payment schedule is structured in three parts:

 ▪ Sh5.2 billion upon completion,

 ▪ Sh5.2 billion when the Field Development Plan (FDP) is approved or by June 30, 2026

 ▪ And a further Sh5.2 billion spread over five years beginning in the third quarter of 2028.

An FDP outlines how a field will be developed, covering environmental, social, production, and cost plans.

Tullow will also receive royalty payments under certain conditions and retains a no-cost option to re-enter the project with a 30 percent stake if a third party enters in future phases.

“Tullow also retains a no-cost back-in right for a 30 percent participation in potential future development phases. This right can be exercised if a third-party investor participates in future development phases, whether through a sale or farm-down of the purchaser’s interest in the assets.”

Auron Energy will take on all decommissioning duties and associated environmental liabilities tied to the Kenyan assets, with the exception of one community petition, which will remain Tullow’s responsibility.

Final completion depends on approval by the Competition Authority of Kenya and the successful separation of Tullow Kenya from its parent group.

Tullow anticipates the transaction will close later in 2025, with the initial payment made at closing and further payments linked to project milestones.

This sale represents Tullow’s complete exit from Kenya’s oil sector after years of exploration.

Responsibility for developing the resources now passes to Gulf Energy, setting the stage for the next phase of Kenya’s oil ambitions.