Kenyan Oil At Risk As TotalEnergies, Africa Oil Withdraw From Oil Project

Kenya's hopes to produce its own oil may be hampered by the departure of London-listed Africa Oil and French supermajor TotalEnergies from a Kenyan oil project, leaving Tullow Oil as the only owner of the blocks.

Due to "differing internal strategic reasons," the two minority partners of Tullow Oil's Kenyan subsidiary have told Tullow that they intend to withdraw from Blocks 10BB, 13T, and 10BA in the South Lokichar Basin project, according to a statement released by Tullow on Tuesday.

Tullow will have a 100% operating interest in these blocks following the departure of TotalEnergies and Africa Oil.

The anticipated cost of the project and pipeline for oil exports is $3.4 billion.  

Although Africa Oil and TotalEnergies now have other priority projects, Tullow Oil and its minority partners have long desired to develop the South Lokichar project.

Keith Hill, president and chief executive officer of Africa Oil, stated, "We have decided to exit our Kenya concessions as our strategy has changed to focus on production and high potential exploration opportunities, including our Orange Basin portfolio where we are currently evaluating the exciting Venus discovery, offshore Namibia."

“We continue to believe these discoveries will form the basis of a significant oil producing province in the coming years with strategic value for the country,” he added.

In a statement released today, Tullow Oil stated that it "remains focused on securing a strategic partnership this year" for the project.  

According to individuals acquainted with the situation, India's ONGC Videsh and Oil India Ltd are interested in purchasing 50% of the project.

The Chinese state-owned corporation Sinopec, which is also allegedly in discussions to invest in the Kenyan oil project, will, however, present a strong challenge to the Indian proposal.

Sinopec has shown interest in the share following a delay in a sale due to the Indian businesses, according to PTI.