The National Assembly has raised concerns over Tullow Oil's sale of oil assets to Gulf Energy, citing a lack of detail in the Ksh15 billion ($120 million) deal.
A report tabled by the National Assembly Energy Committee highlighted concerns about the sale of oil assets centred around the country's nascent oil industry's continuity, governance, and strategic direction.
“There is limited information regarding the terms of the exit, the implications of the transaction on Kenya’s commercial oil prospects, and its potential impact on the completion and timely approval of the Field Development Plan,” it said.
In April, Tullow Oil ended a decade-long quest to develop discoveries in April, when it sold the inland fields covering the oil assets to Gulf Energy, a Nairobi-based oil and gas trader.
This came after Tullow announced plans to sell off its investments in recent months, aimed at reducing its debt below $1 billion (Ksh129 billion) this year.
In the new deal, Tullow is set to receive payments in instalments of Ksh5.3 billion, totalling Ksh14.9 billion.
One key benefit for the British company in the deal was that it would be entitled to future payments based on royalties from oil production.
Further, Tullow would have the option to take part in future developments in Kenya without incurring extra costs.
However, Tullow noted that the sale of working assets to Gulf Energy was progressing well. “We have a high level of confidence in it completing with the receipt of the first two payments totalling $80 million (Ksh10.3 billion) expected during 2025.”
By deciding to pull the plug on Kenya, Tullow dealt a big blow to the country’s aspirations of becoming an oil superpower, particularly with the Lokichar Basin in the north of the country seen as a key source of oil.
Full production of oil in Kenya has not been achieved, mainly because the country lacks the necessary infrastructure. For instance, a steady pipeline to transport oil from Turkana to the coast for export has been a pressing problem for decades.
Passage of the development plan, which is still pending, became one of the obstacles Tullow faced with the project. Partners TotalEnergies SE and Africa Oil Corp. exited the joint venture in 2023, and the company failed to find a strategic partner to replace them.
