China is in the running to get a piece of Kenya's black gold as Tullow Oil and Total count losses in steering the project, as reported by Daily Nation on Saturday, February 22.
The Asian nation has emerged as a favourite to be Kenya's new partner, in fully exploiting the Turkana oil fields. This is after the two joint project partners kicked off the sale of part of their fields in South Lokichar, Turkana County.
The publication reported that China National Offshore Oil Corporation (CNOOC) has front row seats to the purchase of an estimated 32.5 per cent stake that was put up for sale. The acquisition would make it the single largest shareholder in the project.
Tullow boasts a 50 per cent stake, with Africa Oil and Total SA splitting the remaining share equally at 25% each. Tullow will let go of 20 per cent of its stake, while Total will sell half its share.
If the sale is successful, CNOOC will have the lion's share of the fields, at 32.5%.
The daily reported that the Chinese company had the intention to merge its operations in Kenya with its interests in Uganda.
CNOOC owns a 33% stake in Uganda's Albertine Basin, along with Tullow and Total. The firm was one time the single largest investor into Kenya's hydrocarbons when they first explored oil in Isiolo but exited when they hit a dead end.
A source who spoke to the publication stated that the opportunity was too good to pass up as "They are primed to have these assets."
Tullow Kenya managing director Martin Mbogo ascertained that there was progress in the negotiations and that the deal would be sealed by June 2020.
Finances appear to have become even tighter for the British oil exploration company after it, on February 5, announced plans to layoff an unknown number of employees in a new restructuring plan.
In a notice seen by Kenyans.co.ke, the company indicated that it had embarked on reviewing its business operations and financial performance which has constantly been affected by the company’s growing wage bill.
“These factors have affected the ability of the company to continue sustaining the human resource wage bill.
“Resultantly, it is now inevitable that there may be job losses and redundancies at all levels and cadres of our organisation,” read the notice in part.
The company further noted that the woes were also to be blamed on the production trends in Kenya and other African countries.
“A review of the production performance issues in 2019 and its implications for the longer-term outlook of the fields has been undertaken and has shown that the Group needs to reset its forward-looking guidance,” added the notice.
A take over of a piece of the project would come in handy as a boost to the realisation of President Uhuru Kenyatta's Big Four Agenda.
President Kenyatta flagged off the first consignment of crude oil for exportation in August 2018. He had stated that the exports would help grow Kenya’s economy adding Kenya to the list of oil exporters in the world.
