After years of setbacks and mounting losses, Tullow Oil has formally handed over its Kenya oil operations to Gulf Energy in a deal that marks a significant turning point for the long-stalled project.
Tullow’s 2024 full-year results showed a bruising $213 million exploration write-off—$145 million of which was tied to its troubled Kenyan assets. The hefty impairment underlined the company’s dimming hopes of ever reaching a Final Investment Decision (FID) in Kenya, with Tullow opting to walk away and focus on more promising fields.
Enter Gulf Energy.
Kenya’s largest fuel supplier, Gulf Energy, has now acquired 100% of Tullow’s Kenya interests in a transaction worth at least $120 million. The structured deal includes an upfront payment of $40 million, another $40 million once Kenya’s Field Development Plan (FDP) is approved or by June 2025, and a final $40 million spread over five years. It’s a phased approach that gives both parties clarity and commitment without overwhelming risk.
For Tullow, the move is part of a broader strategy shift. The company says the sale will help reduce its debt load and streamline its focus on more productive oil fields. The Kenyan exit follows a similar divestment in Gabon, signaling Tullow’s retreat to safer, cash-generating bets.
But this isn’t a complete goodbye.
Tullow has retained the right to buy back a 30% stake in the Kenya project if things start to look up—a cautious show of confidence in the potential Gulf Energy brings to the table.
That potential is anchored in Gulf Energy’s local strength. As the top fuel supplier in Kenya, the company knows the domestic market intimately, giving it a clear advantage where Tullow, a UK-based explorer, may have faltered. With this local expertise, Gulf Energy could inject new momentum into a project that’s been in limbo for far too long.
The deal also transfers future costs and operational risks squarely onto Gulf Energy, relieving Tullow while giving the Kenyan company a chance to lead from the front. If successful, this move could finally breathe life into Kenya’s long-hoped-for oil dreams.
After a decade of planning, delays, and dashed expectations, Kenya’s oil sector may be on the cusp of a revival—one driven not by foreign explorers, but by homegrown capability.
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