Kenya eyes 20pc stake buy-back in Turkana oil
Tullow Oil facility at Ngamia 8 in Lokichar, Turkana County, on February 18, 2020.
Kenya is readying itself to buy back a stake of up to 20 per cent in Turkana oil project in a critical decision that could eventually be decided by whether the government approves the project’s revised development plan, and availability of requisite funds.
November 3, Energy and Petroleum Regulatory Authority (Epra) Director-General Daniel Kiptoo told the Nation that the government is yet to make a decision on whether to exercise its back-in option provided by the production-sharing agreement.
“The production sharing contract gives the government a right to back-in and join the contractor group by acquiring a 20 per cent stake in the project,” said Mr Kiptoo.
“This option is exercised once the field development plan is approved and the projects move from exploration phase to development,” he said.
According to the Epra Director-General, the government will make a decision on whether to activate the clause once ongoing review of the Field Development Plan (FDP) of the project has been concluded, which will determine fate of the project.
British oil firm Tullow Oil currently owns 100 per cent of the stake in blocks 10BA, 10BB and 13T in the South Lokichar Basin in Turkana. This is after its joint-venture partners Total Energies and Africa Oil Corporation, who had 25 per cent stakes each in the blocks, offloaded their stakes to Tullow.
Nonetheless, Mr Kiptoo said the option can be exercised directly or via a vehicle such as the National Oil Corporation of Kenya (Nock).
And to underline the government’s intention to potentially purchase back a stake in the venture, Nock has this week moved to hire a consultant that will among other tasks, be charged with enabling it back-in the oil project on behalf of Kenya.
Besides 10BA, 10BB and 13T, other oil blocks in the South Lokichar Basin include Amosing, Twiga, Etuko, Ekales-1, Agete, Ewoi, Ekunyuk, Etom, Erut and Emekuya.
“The general terms of reference of the consultant (include) support National Oil initiative for back-in-rights in Lokichar Basin discoveries. Provide leadership and support for national upstream to fully be on-boarded for back in rights on behalf of the government,” said the company.
