Tullow Oil PLC has taken full control of the Project Oil Kenya development in Turkana County after its two joint venture partners strategically withdrew from the project.

Tullow Oil will acquire a 100 per cent equity in the firm if Kenya Government approves with the international company intending to continue with its local oil prospecting endeavors.

Tullow Kenya BV Managing Director Madhan Srinivasan says the firm is in talks with strategic partners interested in the development of the South Lokichar basin project.

“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,” said Srinivasan.

According to Tullow, Total Energies and Africa Oil Corp had informed it of their plan to withdraw from blocks 10BB, 13T and 10BA in the South Lokichar Basin for strategic reasons.

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“As a result, Tullow’s working interest in these blocks will increase from 50 per cent to 100 per cent. The Board considers that owning 100 per cent 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,” he added.

The company says it already submitted a revised Field Development Plan (FDP) to the Energy and Petroleum Regulatory Authority (EPRA) in March and is being reviewed.

Due to the exits, Tullow’s net Project 2C contingent resources are set to rise from 231 mmboe to 461 mmboe, raising its total contingent resources from 605 mmboe to 836 mmboe.

The oil prospecting firm’s net capital expenditure (capex) guidance for 2023 in Kenya will increase from c.$10 million to c.$15 million, which is less than 5 per cent of Group capex.

However, the company admitted it had been facing hurdles in securing strategic partners of the equity developments but said there were ongoing discussions on the new developments.

“Whilst introducing strategic partners has taken longer than expected, Tullow remains focused on securing strategic partners this year,” stated the communiqué from Tullow.

The Government’s FY 2023/2024 budget tabled by National Treasury in April shows Sh651.2 million was allocated to the State Department for Petroleum to expand Project Oil Kenya.

Concluding the FDP process, according to the document, has been given top priority in the programme.

The document tabled in Parliament states: “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.”