Tullow Oil has reiterated its commitment to scale up the development of Project Oil Kenya in 2023
- The global independent oil and gas exploration and production firm said it plans to invest KSh 1.24 billion (US$10 million) in Project Oil Kenya
- Tullow and its Joint Venture partners (Africa Oil and Total Energies) are also working closely with the local government agencies seeking to finalise the firm’s field development plan (FDP)
Tullow Oil Plc has reiterated its commitment to scale up the development of Project Oil Kenya in 2023. The global independent oil and gas exploration and production firm said it plans to invest KSh 1.24 billion (US$10 million) in Project Oil Kenya appraisal engagements focusing on fine-tuning the Field Development Plan (FDP) and related local operations.
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A trading statement and operational update issued by the London Stock Exchange (LSE) listed firm confirms that efforts to secure a strategic partner for the local oil development project are still on course.
The statement indicated that while the efforts to secure a strategic partner progress, Tullow and its Joint Venture partners (Africa Oil and Total Energies) are also working closely with the local government agencies seeking to finalise the firm’s field development plan (FDP).
Tullow Oil project in Kenya
As part of the local licensing procedures, Tullow and its Joint Venture partners submitted the Project Oil Kenya Field Development Plan (FDP) for government review in December 2021 and continue to engage with a view to reaching an agreement in the coming months.
In the statement, Tullow Oil plc Chief Executive Officer Rahul Dhir said that Tullow continues to focus on the process to secure a strategic partner for the development project in Kenya.
“In parallel, Tullow and its JV Partners are working with the Energy and Petroleum Regulatory Commission Authority (EPRA) and the Ministry of Energy and Petroleum to finalise the FDP.”
The firm’s financial update indicates that the Group generated total revenue, including the cost of hedging, of c.$1.7 billion, at a realised average oil price of c.$102/bbl before hedging and c.$87/bbl after hedging.
Free cash flow for the full year 2022 is expected to be c.$267 million, ahead of guidance, with lower oil prices towards the end of the year offset by continued focus on cost control and deferrals of decommissioning costs and capital expenditure.
During 2022, Tullow supported STEM education through a range of programmes from primary to tertiary education across its countries of operation and created new entrepreneurship opportunities in Ghana and Kenya. Thousands of beneficiaries of these programmes are now leveraging new knowledge and skills as productive members of their communities.
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Exploration of oil
At the same time, Tullow said it has leveraged its differentiated understanding of the Tano Basin in Côte d’Ivoire, to secure a 90% interest in a new offshore exploration licence (CI-803) which, along with the Tullow operated CI-524 licence, provides Tullow with a strategic position in an area adjacent to the Group’s producing fields in Ghana.
In Gabon, Tullow said it continues to focus on selective infrastructure-led exploration (ILX) activities to underpin production. In the Perenco-operated Simba licence, Tullow and its JV Partners have matured several low-risk and compelling ILX options for drill readiness in 2023-25.
In the emerging basins of Guyana and Argentina, Tullow said it continues to seek opportunities to unlock value from the significant prospective resource base.
In 2022, capital expenditure on exploration activities was c.$45 million. In 2023, this is expected to be c.$30 million, which includes drilling costs for one non-operated well on Simba in Gabon.
Tullow supporting micro business in Kenya
In a separate story, Tullow recently partnered with the KCB Foundation to develop a social, economic investment (SEI) programme for micro businesses.
Under the initiatives, the partners will provide competence-based training, training on entrepreneurship and business development. Participants are required to write business plans and receive assistance to link them to finance to secure working capital for their businesses.
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The SEI programme started in 2019 with 265 Tullow-sponsored beneficiaries, drawn from the seven counties that are part of Project Oil Kenya, to study building, construction and automotive subjects.
The courses included competence-based training in automotive, electrical technology, welding and plumbing and were held in schools in Nairobi. The beneficiaries completed their competence-based training and were able to sit exams in 2019.