Tullow Oil, a key player in Turkana’s South Lokichar Basin, has cut its budget for Kenyan operations by 33.3 per cent.
This reduction sees a decrease from $15 million (approximately Sh2.1 billion) in 2023 to $10 million (approximately Sh1.4 billion) for the current year.
While the exact reasons for the budget cut have not been explicitly disclosed by the company, it could be attributed to strategic adjustments as Tullow Oil awaits updates on the Field Development Plan (FDP) submitted to the government last March.
The Energy Petroleum Regulatory Authority (EPRA) has extended the review period for the updated FDP until June 2024.
CEO Rahul Dhir emphasized the significance of strategic planning, collaboration with the government, risk mitigation, and potential partnerships in Tullow Oil’s approach to its operations in Kenya. Despite the budget reduction, Kenya remains a vital option for driving value and growth for Tullow Oil, with a comprehensive development plan in place aimed at harnessing significant resources.
Exploration activities remain a key focus for Tullow Oil in 2024, with a capital expenditure plan of approximately $250 million (Sh35.6 billion) allocated for various operations, including those in Ghana, the non-operated portfolio, Kenya, and exploration endeavors. Furthermore, provisions have been made for decommissioning activities in the UK and Mauritania, along with potential impairments in Ghana and Gabon.
Following the exit of joint venture partners TotalEnergies and Africa Oil Corp in May 2023, Tullow Oil now holds full ownership of the project, providing greater strategic flexibility.
The company continues to collaborate with the Government of Kenya to explore options for accelerating production and cash flow to unlock the value of its well-matured resource base.
Tullow Oil’s Early Oil Pilot Scheme (EOPS) in Kenya has achieved significant milestones, completing two years of production and gathering crucial reservoir and production data. The scheme, focusing on the development of existing wells in the Amosing and Ngamia fields, has contributed to advancing Tullow Oil’s objectives in the region.
