Tullow Oil plc has announced that it has signed a landmark Sale and Purchase Agreement with Gulf Energy Ltd to divest its entire Kenyan portfolio for a minimum cash consideration of $120 million, a strategic move that marks a new chapter for both companies and the country’s upstream oil ambitions.
Under the terms of the deal, Tullow Overseas Holdings BV will sell 100% of shares in Tullow Kenya BV, the entity holding all of Tullow’s working interests in Kenya.
The sale includes an estimated 463 million barrels of 2C contingent resources, making it one of the most significant upstream transactions in Kenya’s recent history.
The $120 million consideration will be paid in three structured tranches:
-
$40 million upon completion of the transaction, expected in Q3 2025;
-
$40 million upon Field Development Plan (FDP) approval or by June 30, 2026, whichever comes first;
-
$40 million spread over five years from Q3 2028 onwards.
In addition to the cash deal, Tullow will retain a royalty interest subject to certain conditions and a no-cost back-in right of up to 30% participation in future development phases, should a third-party investor step in.
Tullow’s CFO and Interim CEO, Richard Miller, emphasized the strategic value of the sale:
“The transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totaling $80 million expected before the end of the year.”
This Kenyan exit forms part of Tullow’s broader pivot towards high-margin, self-funded production assets with robust cash flows. It comes shortly after the company announced a $300 million sale of its Gabonese assets, bringing the expected combined proceeds for 2025 to $380 million.
The deal is subject to regulatory approvals, including from the Competition Authority of Kenya, and hinges on the successful physical and functional separation of Tullow Kenya.
For Kenya, the entry of Gulf Energy Ltd—a locally grounded player—into full control of Tullow’s oil interests signals renewed confidence in domestic energy development. It also raises hopes of accelerated progress on oil commercialisation, which has faced several delays in recent years.
This move could well be the spark needed to reinvigorate Kenya’s long-anticipated emergence as an oil producer, bringing jobs, infrastructure, and new investment into the country’s northern region.
As the energy landscape evolves, this deal stands as a testament to strategic adaptation, and a possible turning point for Kenya’s upstream oil future.
Related Content: Gulf Energy Takes The Helm As Tullow Exits Kenya’s Oil Project
