Tullow Oil PLC has taken a decisive step in restructuring its portfolio, confirming the sale of its entire Kenyan operations to Gulf Energy Ltd in a deal worth a minimum of US$120 million.
The move, announced on 15 April 2025, marks the British oil and gas company’s complete exit from Kenya, as it sharpens its focus on West African assets and accelerates efforts to reduce debt.
As part of the agreement, Tullow will hand over its wholly owned subsidiary, Tullow Kenya BV, to Gulf Energy – a prominent Kenyan energy and infrastructure firm with a strong footprint across East Africa’s petroleum supply chain.
Under the terms of the transaction, Tullow will receive an initial cash payment of US$40 million upon completion, followed by another US$40 million by June 2026 or upon the approval of a Field Development Plan. A final US$40 million, contingent on future oil prices, will be paid over a five-year period starting in 2028, with any outstanding balance to be settled by 2033.
Tullow Oil has also secured a royalty interest and a back-in option, giving it the right to reclaim up to 30% of any future development phases in Kenya at no cost—should Gulf Energy advance the project.
Richard Miller, Tullow’s chief financial officer and interim chief executive officer, said the deal forms a core part of the company’s strategic repositioning.
“This transaction significantly reduces our capital exposure while preserving long-term upside,” Miller said. “With this and the US$300 million recently raised from the Gabon sale, we are in a stronger position ahead of our planned refinancing. Gulf Energy is a credible partner with the capacity to move this project forward and unlock value for Kenya.”
In addition, the deal transfers all past and future liabilities linked to the Kenyan assets to Gulf Energy, easing financial pressure on Tullow. The sale, however, is subject to regulatory approvals, finalisation of the sale and purchase agreement, and submission of payment guarantees.
The Kenyan assets, largely based in the South Lokichar Basin, were previously seen as a major frontier for Tullow’s expansion. But amid development delays and a shift in focus to its more lucrative operations in Ghana, Gabon and Côte d’Ivoire, the company is now realigning its priorities.
Gulf Energy is expected to inject new momentum into Kenya’s oil ambitions. The firm’s strong downstream portfolio and infrastructure expertise position it to revive long-delayed plans for onshore oil development in the region.
Source: By Asaaseradio.com