Tullow's Kenya, Uganda Projects Timelines Slip

By Shadia Nasralla
Wednesday, June 26, 2019

Britain's Tullow Oil has delayed the final investment decision (FID) for its Kenya project to 2020 and has not yet sealed a tax deal in Uganda that is needed for the progress of its plans there with Total , it said on Wednesday.

The company had aimed to give the final go-ahead by the end of 2019 for its onshore Kenyan oilfields, which are expected to produce up to 100,000 barrels per day.

The Kenya delay was due to authorities asking for additional community consultations which Tullow expects to be submitted in the second half of the year - later than anticipated, it said in a trading statement.

"The Partners and the Government of Kenya are reviewing the most likely timeline to FID which Tullow now expects in 2020," Tullow said.

On Tuesday, Tullow and its partners Total and Africa Oil signed commercial agreements with the Kenyan government, but it still needs to lock in financing for a $1.1 billion pipeline to bring the oil to the coast.

In Uganda, progress is also slower than expected. A tax deal needed to close the $900 million sale of a stake in its Ugandan fields to Total is pending.

As recently as April Tullow said the Uganda talks were expected to conclude shortly.

"We continue to work constructively with our Joint Venture Partners and the Government of Uganda to agree a way forward and the consequent timing of FID. Nevertheless, although negotiations continue, Tullow is currently considering all options in pursuing the sale of its interests in Uganda," it said.

Barclays said in a note the likelihood of a final decision on Uganda to come in as planned this year was declining.

"Tullow's comment... indicates the potential for a fresh approach/structure to the deal that can be acceptable to all stakeholders, but increases uncertainty around the timing of the development," Barclays said.

Tullow expects its first-half gross profit to be $500 million, yielding pre-dividend free cash flow of about $100 million that would rise to $450 million for the full year, excluding $200 million due to be paid on closure of the Uganda deal.

Tullow's much-watched net debt is expected to be at $3 billion in June compared with $3.1 billion in December.


(Reporting by Shadia Nasralla; Editing by Edmund Blair and Louise Heavens)

Categories: Africa

Related Stories

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

DOF Secures Moorings Hook-Up Job in Asia Pacific

Floating Offshore Wind Test Center Planned for Japan

Synergy Marine Group Completes Conversion of LNG Vessel to FSRU

Japan Picks Wood Mackenzie to Assess Trump-Backed Alaska LNG Scheme

PTTEP Greenlights $320M Offshore CCS Project at Arthit Gas Field in Thailand

Norwegian Oil Investment Will Peak in '25

Current News

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Brownfield Output Decline Accelerates, says IEA

PV Drilling Takes Ownership of Noble Corporation’s Stacked Jack-Up Rig

Hanwha Ocean Enlists ABB for Singapore’s First Floating LNG Terminal

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

POSH Set to Tow Nguya FLNG from China to Eni’s Congo Field

Chinese Contractor Secures Offshore Oil and Gas ‘Mega Deal’ from QatarEnergy

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com