Tullow meets license extension conditions
Oil explorer Tullow has affirmed its Kenyan project license extension to December 2021 following its submission and subsequent approval of a 2021 programme and budget.
The two documents signed off by the Ministry and Petroleum and Mining had been the prerequisite for the retention of its extended exploration license in August.
Failure to submit the 2021 plans by the end of October would have seen the firm booted out of Project Oil Kenya losing its exploration licenses for blocks 10BB and 13T.
The license extension allows the project’s joint venture partners to reassess the project including tweaking costs to correspond to prevailing low oil prices globally.
Additionally, the submission and approval of the work plans clears the path to the expected financial investment decision (FID) in 2021 alongside the submission of field development plans which precedes the commercial development of Kenyan oil fields.
“I would like to thank the Government of Kenya for granting this extension which the joint venture partners will use to fully re-assess the development concept for this important project,” Tullow Oil Plc Chief Executive Officer Rahul Dhir said on Monday.
Following its withdrawal of a force majeure notice in August, a note that it couldn’t honour its obligations to government, the oil explorer has moved to clear up doubts on the viability of the project.
In a notice issued in November for instance, Tullow stated the scale of Kenya’s oil resources is substantive enough to support full-scale commercial development.
Additionally, the explorer noted it has the required balance sheet to deliver on its 2021 objectives.
“On Kenya development, we are confident, particularly in light of the licence extension discussion, allows us the time to complete the redesign work. We are continuing to work with the Government of Kenya in seeking the much needed fiscal package, as per the agreed Heads of Terms, to deliver an investable project and an FDP by end 2021,” added Mr Dhir.
Kenya has 1.5 billion barrels in gross estimated crude oil reserves whose value at present is estimated at about Ksh.8.2 trillion (Ksh.5450 per barrel).