Ksh15.56 Billion Gulf Energy-Tullow Deal Reshapes Kenya’s Oil Prospects

Gulf Energy has inked a $120 million (Ksh15.56 billion) deal to acquire the assets of Tullow Kenya.The two firms confirmed the agreement on Tuesday morning, setting the stage for the British oil and gas company’s exit from the country after 13 years of operations.

As part of the deal, Gulf Energy will make three equal payments of $40 million (Ksh5.18 billion), with the first instalment due upon approval of Tullow’s Field Development Plan (FDP) or by June 2026, whichever comes first.Gulf Energy will release the second $40 million tranche once the deal receives regulatory approval.



The final payment is due by June 2033. If Gulf fails to clear the full amount by that deadline, it will be required to make a lump-sum payment to Tullow.In addition to the final instalment, Gulf Energy will start making quarterly payments of $2 million (Sh259.

46 million) from the third quarter of 2028—provided Brent crude oil averages at least $65 per barrel in the previous quarter.Tullow struck oil in South Lokichar, Turkana County back in 2012, raising hopes for Kenya’s emergence as an oil-producing nation. But more than a decade later, the company has yet to begin commercial production.

A string of setbacks, including partner withdrawals, lack of investment, and regulatory delays, stalled the project’s progress.Tullow initially planned to launch commercial oil production by 2024 but failed to secure a strategic investor to de-risk the venture and provide the necessary funding. The situation worsened in May 2023 when its partners, Africa Oil and TotalEnergies—each with a 25 percent stake—exited the project, citing concerns over its competitiveness against other global investments.

“We look forward to working with Gulf Energy, who have the requisite financing to complete the transaction and are a strong and credible counterparty, and by doing so, unlock material value for the people of Kenya,” said Richard Miller, Tullow’s interim CEO.The post Ksh15.56 Billion Gulf Energy-Tullow Deal Reshapes Kenya’s Oil Prospects appeared first on Nairobi Wire.

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