Tullow Oil, a company listed on the London Stock Exchange, has finalized an agreement to divest its onshore oil assets in Kenya to Gulf Energy, an oil trading firm based in Nairobi.
The transaction is valued at $120 million. While this sale marks Tullow’s exit from its current operational role in these Kenyan assets, the deal includes a provision that could allow Tullow to re-engage with the project should it progress to a development phase in the future.
The announcement of this transaction had a positive impact on Tullow Oil’s stock price. In late morning trading on Tuesday, Tullow’s shares on the London market experienced a rise of 4.15%, reaching 13.91 pence, equivalent to 18.42 US cents.
This market reaction suggests investor approval of the strategic move.
Tullow Oil played a pioneering role in opening up the frontier Lokichar basin in the remote northern region of Kenya.
The company’s initial entry into this acreage occurred in 2010, and two years later, in 2012, it made a significant breakthrough with the Ngamia-1 discovery. This discovery was a landmark event, confirming the oil potential of the Lokichar basin and attracting considerable attention to Kenya as a new oil frontier. Despite this initial success and subsequent exploration activities, Tullow has now opted to sell its current interests to Gulf Energy. The conditional clause for future involvement indicates a strategic repositioning rather than a complete abandonment of the basin’s potential. Gulf Energy, as the new owner, will now take on the responsibility of further appraisal and potential development of these onshore assets.
SOURCE: Oilspot Suriname