Tullow Oil, operating in Kenya’s South Lokichar Basin, remains committed to Kenya, but its budget cut reflects a wait-and-see approach to its development plan.
The 33.3% cut, from $15 million to $10 million for the fiscal year 2024, comes as the company awaits government approval of its updated Field Development Plan (FDP).
The British oil and gas exploration company submitted the updated FDP in March 2023, aiming to develop oil resources and achieve production targets.
Due to approval delays, the Energy and Petroleum Regulatory Authority (EPRA) extended the review period for the FDP until June 2024.
“The development has been designed to be robust at lower oil prices, and we continue discussions with prospective strategic partners for this project,” Tullow Kenya BV (TKBV) Managing Director Mr Madhan Srinivasan said in an emailed statement.
On the other hand, CEO Rahul Dhir confirmed no other recent events impacted the year-end results released Wednesday.
“Soon after I joined Tullow in July 2020, we implemented a plan to transform our business. This plan is achieving targeted results, and since the end of 2020, we have generated over $1.1 billion of free cash flow, reduced net debt by over 30%, and taken the business from peak gearing of 3x to 1.4x net debt to EBITDAX. ,” Dhir said.
Under the Early Oil Pilot Scheme (EOPS), Tullow transported 2,000 barrels of oil daily from Turkana to Mombasa. This marked the first-ever export of Kenyan crude oil, lifting 240,000 barrels.
2024 Exploration Activities
Tullow plans to allocate a portion of its $250 million capital expenditure to Kenyan exploration activities.