Tullow Oil PLC’s latest financial disclosures show why its decision to sell its Kenyan assets to Gulf Energy was both timely and necessary, with Gulf Energy looking at capitalizing on its local Kenyan roots to strategize and rejuvenate the company.
In its 2024 full-year results, the London-listed energy firm revealed a staggering $213 million in exploration write-offs, with a significant $145 million attributed to Kenya. The impairment followed a reassessment of development risks tied to ongoing delays in the approval of the Field Development Plan (FDP), reflecting the company’s cautious stance on reaching a Final Investment Decision (FID) in Kenya.
This financial hit underscores Tullow’s growing reluctance to pursue high-risk frontier exploration, particularly in East Africa. The move aligns with its broader strategy to prioritize value-accretive investments and strengthen its core producing operations in West Africa.
Tullow formally announced in June that it had entered into a definitive agreement to sell its entire interest in Project Oil Kenya to Gulf Energy, an entity backed by the family office of Kenyan billionaire Humphrey Kariuki. The transaction, valued at a minimum of $120 million, will be structured in phased payments: $40 million upon completion, $40 million upon FDP approval or by June 30, 2026—whichever comes first—and a final $40 million to be paid over five years beginning in Q3 2028.
Tullow’s leadership welcomed the deal, describing it as a crucial step in its ongoing deleveraging strategy. Beyond the immediate cash infusion, the divestment reduces Tullow’s capital commitments in a region where progress had been slow and uncertain. The company also expressed confidence in Gulf Energy’s capacity to take the project forward.
The divestment mirrors Tullow’s recent $300 million exit from Gabon and fits into its long-standing objective of reshaping its portfolio. By retreating from non-core assets and reducing debt, Tullow aims to refocus on its producing assets in Ghana and Côte d’Ivoire, and to shore up its balance sheet ahead of future refinancing milestones.
With Gulf Energy stepping in, the move signals a transition of Kenya’s oil ambitions into the hands of a local player with regional understanding and financial muscle, potentially offering new hope for the long-stalled project.
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