The joint venture has spent circa $2bn in Kenya since 201112 May 2023 21:47
This is what is holding the FID up.
Tullow are owed $1.8 Billion + development costs.
A farm in would have to pay us this back, as they would recover this through future production.
Now what is our current debt levels????
Do the maths, we will be debt free this year, now isn’t that what Rahul said in March update, this will be the year, people stop talking about debt….
Gl all
Tullow described as “ludicrous” a Kenyan newspaper report claiming it had asked for KES204bn ($1.88bn) in compensation from Kenya’s government in lieu of exploration costs incurred from 2012 onwards.
“We have submitted our expenditure for audit ahead of cost recovery as and when production starts, but clearly we only recover our costs from production as per [the] licence,” says Tullow.
On the government response to its submission, the company says: “We are going through a process—an entirely normal process that happens in all oil producing countries—to agree what costs are covered.”
Tullow expects to reach an agreement with the Kenyan government, adding “the joint venture has spent circa $2bn in Kenya since 2011; we would look to recover a considerable part of that plus development costs as part of cost recovery. I do not know how long the audit process will take. We need a viable project first.”
Test case
These negotiations will be the first significant test for Kenya’s 2019 petroleum and energy bill as well as the authority and capacity of the fledgling energy regulator, says Edward Hobey-Hamsher, a senior analyst at consultancy Verisk Maplecroft's Africa Risk Insights team.
“If the two parties cannot agree, the base-case scenario is that Tullow seeks international arbitration, a right enshrined in the petroleum act,” he says.
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