MASSIVE NEWS !! Indian firm renews interest in Tullow's Turkana oil blocks 1/22 Aug 2023 20:24
Indian Oil Company–ONGC Videsh Limited (OVL) could take up a stake in Tullow Oil’s Kenyan assets, with the British firm hoping to secure strategic partnership this year.
This follows the exit of joint venture partners–Africa Oil Corp and Total Energies, a move said to have given Tullow flexibility in negotiations with strategic partners. Tullow has since described the recent withdrawal of the Kenya Joint Venture Partners, as “ due to differing internal strategic reasons.
Canadian firm-Africa Oil Corp reportedly dropped from the project on concerns over possibilities of finding an investor who would support commercial exports of Kenya's crude oil, including construction of the 824km Lokichar-Lamu oil pipeline. Total on the other hand has shifted focus on already producing fields in other markets, with the exits throwing Project Oil Kenya into disarray. It left Tullow with no option but to assume a 100 per cent equity position.
The joint venture break up came on the back of a slow negotiation process between Tullow and potential investors, where ONGC Videsh and Indian Oil Corp were among potential targets in talks the started in November last year.
The two would then develop cold feet in May this year, leaving Tullow at crossroads on its plans to offload at least $3.4 billion (Sh484.4 billion) stake at the Lokichar oil project. With the breakup of the JV, ONGC Videsh is reported to be seeking clarity before making an investment decision, with Tullow yesterday confirming talks.
“Tullow confirms that several interest parties including India’s ONGC Videsh Limited have expressed their interest in coming on-board as a strategic partner in the development of our Kenyan asset,” Tullow Kenya BV managing director Madhan Srinivasan, told the Star. Tullow assets in Kenya covers blocks 10BB, 13T, and 10BA in the South Lokichar Basin and is operated by Tullow Kenya BV. “Tullow is however not at liberty to publicly make any further comment as engagements are still in progress,” Srinivasan said. However, he said the commits to making the necessary public disclosures once specific milestones are achieved. All prospective strategic partners remain engaged and detailed farm-out discussions continue with a number of companies. “Whilst the process has taken longer than expected, Tullow remains focused on securing a strategic partnership this year, ” he said.
The latest developments come even as the government continues to support Tullow in search of strategic partners, whilst calling on the private sector to invest in related infrastructure, including the planned crude oil pipeline.
According to Energy Cabinet Secretary Davies Chirchir, the government is in talks with Chinese and Indian investors into putting capital in the project, as it reviews the Final Investment Decision tabled by Tullow, He said Kenya would continue to back Tullow's push for commercial oil production in Turkana, despite the timelines shift to beyond 2027.
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