Tullow Oil has agreed to sell its entire stake in Kenya to Auron Energy E&P, an affiliate of Gulf Energy Ltd, for a minimum cash consideration of $120 million.
The deal marks Tullow’s full exit from the East African country, where it holds 463 million barrels of 2C oil resources in the South Lokichar Basin.
Under the terms of the deal, $40 million will be paid on completion, with a further $40 million due by mid-2026 upon Field Development Plan (FDP) approval, and the final $40 million payable between 2028 and 2033, subject to oil price conditions. Tullow will also receive royalty payments and retain a 30% no-cost back-in right for future development phases, should a third-party investor come onboard.
All associated decommissioning and environmental liabilities will transfer to the buyer as part of the transaction, which remains subject to regulatory approvals, including clearance from the Competition Authority of Kenya.
Tullow’s interim CEO and CFO, Richard Miller, said the sale is aligned with the company’s strategy to focus on high-margin West African production and strengthen its balance sheet. Combined with the earlier $300 million sale of its Gabonese assets, the company expects to generate $380 million in proceeds in 2025, supporting debt reduction and capital structure optimisation.
Following the sale, the Kenyan assets will no longer contribute to Tullow’s financial results. The group said the transaction will increase operating profit before tax by approximately $145 million due to exploration cost write-offs.
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