Kenya's plan to fully exploit the Turkana oil wells may have hit a huddle after Tullow Oil, the London based company exploring the region, found itself in deep financial troubles.
According to a report by Daily Nation, the British firm's woes emerged as a result of an inhouse decision to downgrade on production, the departure of CEO Paul McDade and its Exploration Director Angus McCoss.
Media reports indicate that the stock price of the company has been on a freefall.
Tullow resolved to scrap its dividends, a move expected to further strain the firm's ability to raise the finances to facilitate its operations worldwide.
According to Daily Nation, the company's financial crisis is expected to affect its operations worldwide.
Based on the Bloomberg stock index and tracker, Tullow had a difficult year with its operations in Ghana and Guyana at the centre of its woes. This, as a result, caused delays in the firm's operations in Kenya and Uganda.
As of the December 10, market close, the London Stock Exchange-listed firm's share price went on a downward spiral to a 16-year low. Tullow had its market valuation halved by over Ksh130 billion.
"The board has however been disappointed by the performance of Tullow's business and now needs time to complete its thorough review of operations," Dorothy Thompson, Tullow's new executive chair was quoted by Daily Nation.
Tullow cut back on its capital expenditure and costs of running its oil fields, a decision that is likely to affect Kenya, given that the country does not rank among Tullow's top oil fields.
In an article dated August 26, 2019, The Standard reported that President Uhuru Kenyatta and Petroleum CS John Munyes, and former Tullow Oil CEO Paul McDade, during the flagging off of Kenya's first oil for export, revealed Kenya's plan to fully exploit Kenya's oil industry by 2023.
Tullow estimated that Kenya's fields held about 560 million barrels of oil and projected production of up to 100,000 barrels a day from 2022.
“This shipment is the first under EOPS and trucking will continue for the next 18-24 months. For Project Oil Kenya, the Kenya Joint Venture Partners in collaboration with the Government of Kenya target to reach a final investment decision in 2020” McDade was quoted by The Standard.
Following Tullow's crisis, the firm on December 10, stated that it welcomed bids to be purchased at a proper value.
