Indian state owned oil firm to buy struggling Kenya Tullow oil stake
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Indian oil firms confirm talks to buy Kenya Tullow Oil after Africa Oil and Total withdrew from Turkana oil project amid economic viability
Indian oil firms confirm talks to buy Kenya Tullow Oil after Africa Oil and Total withdrew from Turkana oil project amid economic viability.
Days after two partners left the project after waiting ten years for the development to take off, two state-owned Indian oil companies are in talks to purchase a stake in Tullow’s oil project in Turkana.
Oil India and ONGC Videsh, the foreign investment arm of the Oil and Natural Gas Corp. of India, are in negotiations to purchase an undisclosed stake in the three oil blocks that are entirely held by Tullow.
If a contract is reached, it will provide the British oil explorer with the much-needed funding that it has been searching for in order to mitigate its risks for the multi-billion shilling project that entails constructing a crude pipeline and oilfield processing facilities.
“All I can say is some discussion is going on,” Oil India Chairman Ranjit Rath told reporters on Thursday in London.
The revelation of a potential deal comes a day after Africa Oil and Total withdrew from the project amid citing concerns about the economic viability of the Turkana oil project.
Tullow fully owns the oil blocks 10BB, 13T and 10BA in the South Lokichar Basin but a combination of delays in tapping a partner and approval of the commercial plan have delayed the project.
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Tullow had earlier disclosed plans to sell a significant chunk of its initial 50 percent stake in the blocks, having hit financial hurdles of its own.
The firm has been looking for an investor for at least three years in a bid to unlock the project. ONGC Videsh Ltd first held talks with Tullow Oil in Nairobi in July last year.
Tullow had in June last year tied the future of Kenya’s Turkana oil project to the firm and its partners getting a strategic investor.
Africa Oil and Total, who each had a 25 percent stake in the project withdrew on Wednesday, piling pressure on Tullow.
The British oil firm is also awaiting the government’s decision on the Field Development Plan (FDP) that it submitted for review in March.
Kenya had set a December 2021 deadline for Tullow and the former partners to present a comprehensive investment plan for oil production in Turkana or risk losing concession on two exploration fields.
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