Page 4 - AfrOil Week 38 2021

AfrOil COMMENTARY AfrOil

(Photo: Tullow Oil)
Tullow’s new plan for Kenya

The Anglo-Irish firm and its partners Africa Oil and TotalEnergies are looking

to extract more oil from Blocks 10BB and 13T in the South Lokichar basin

AS of the fourth quarter of 2019, Tullow Oil suspend overland shipments of crude from the
(UK/Ireland) had a significant presence in East South Lokichar basin because bad weather had
WHAT: Africa. It was then serving as operator of several caused severe damage to the roads connecting
Tullow has drafted a new blocks in western Uganda, near Lake Albert, EOPS infrastructure to Kenya’s Indian Ocean
field development plan and was widely known as the company that had coast.
for two blocks in western discovered the country’s first commercial crude These adverse events led industry observ-
Kenya. oil reserves in 2006. It also held stakes in several ers to speculate that Tullow might soon exit
blocks in the South Lokichar basin in Kenya and East Africa altogether – and by early 2020, this
WHY: led development work at Blocks 10BB and 13T, looked like a safe bet. The company was reported
The new plan marks a where it was working to launch its Early Oil Pro- to be in talks with Total and CNOOC on a new
departure from the com- duction Scheme (EOPS). deal for the sale of all of its holdings in Uganda
pany’s previous doubts However, the company had also developed and rumoured to be looking into similar options
about East Africa. reservations about its East African projects. for its Kenyan acreage. (It was also at odds with
By late 2019, it had already made one attempt the Kenyan government over its declaration of
WHAT NEXT: to reduce its Ugandan holdings through a force majeure on the EOPS project, even though
Tullow will need more farm-out deal with the French giant Total (now the volumes of oil delivered to Mombasa were
money to execute the plan known as TotalEnergies) and a state-owned far less than originally anticipated.)
– and may have trouble
doing so if it attracts Chinese company, China National Offshore Oil In the case of Uganda, the reports turned out
attention from environ- Corp. (CNOOC), only to see its plans founder to be true. In April 2020, Tullow finalised the
mental groups. because of tax disputes with Kampala. sale of its Ugandan assets to Total and CNOOC
Additionally, Tullow’s EOPS project in Kenya for $575mn.
began running into trouble not long after the But in the case of Kenya, the company did
company loaded its first shipment of 240,000 not leave. Instead, it requested (and secured)
barrels of crude oil for export in Mombasa. an extension to its licence and returned to the
Within months of that first loading, which took drawing board. And it appears to have spent the
place in late August of 2019, the company had to time productively.

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