Africa Oil Corp on Tuesday, May 23, announced withdrawal from the Turkana County-based oil development project.
In a statement, the Canadian oil and gas company indicated that it was fully withdrawing from the joint upstream development project.
Concurrently, the firm announced that it had submitted a notice to the Ministry of Energy headed by Cabinet Secretary Davis Chirchir requesting consent to transfer its rights and obligations to the remaining joint venture partners involved in the oil project.
Following the withdrawal notice, Africa Corp indicated it was cutting investment in the project, which stood at Ksh8 billion on December 31, 2022.
"The carrying value of the Kenya intangible exploration assets was written down to Ksh 8 billion ($58.6 million) at December 31, 2022, and the Company intends to further impair this value to zero," the statement read in part.
Africa Oil Corp Chief Executive Officer Keith Hill revealed that the company was shifting its operations to Namibia.
"We have taken the decision to exit our Kenya concessions as our strategy has shifted to focus on production and high potential exploration opportunities, including our Orange Basin portfolio, where we are now appraising the exciting Venus discovery, offshore Namibia," the firm indicated.
The firm was a significant development partner in oil exploration as it helped the government discover the oil fields in Kenya's South Lokichar Basin. They also helped in marketing oil discovery in the country.
It also contributed to the building of local hospitals, helped connect the communities to piped water and offering medical supplies to local dispensaries.
In Kenya, the Canadian oil and gas firm had partnered with Tullow Oil to explore discoveries in South Lokichar Basin.
Following its exit, Tullow Oil announced that it had acquired total control of the Turkana oil project. This followed the withdrawal of Total Energies.
Tullow indicated it will assume a 100 per cent equity position if President William Ruto's administration approves it.
While reiterating the firm’s commitment to progressing the development of the South Lokichar basin project, Tullow Kenya Managing Director Madhan Srinivasan disclosed that the firm was engaging strategic partners who had expressed an interest in the project based on its economic viability.
"Project Oil Kenya is a low-cost development project that has the potential to unlock material value. Prospective strategic partners remain engaged, and detailed farm-out discussions continue with a number of companies," Srinivasan assured.
Oil discovery was touted to help the country address the high fuel cost and overdependence on exports.
President Ruto's administration struck a deal with Saudi Arabia for a government-government oil deal. The arrangement was expected to have a cooling effect on the dollar and further lower the prices of the commodity.