The UK oil firm, Tullow, tasked with exploring oil in Kenya’s Turkana basin is facing hurdles that threaten to delay Kenya’s dreams of commercial oil exports by 2022. The British firm faces governance issues among other challenges. Last month, the company witnessed a change in its board of management after its CEO and Director of Exploration quit the firm.
The two senior officials were accused of poor leadership that saw a decline in oil production in areas where the company operates.
Additionally, Tullow Oil is sinking in debt which currently stands at $2.8 billion. The high level of debt makes it difficult for the company to raise funds needed for oil exploration. The London based company also got a downgrade in its credit rating from B1 to B2 by the Moody’s rating agency. The downgrade will affect Tullow’s ability to receive affordable loans.
Oil exploration in the Northern part of Kenya is at a crucial stage as the key stakeholders; the government, Total, Africa Oil, and Tullow oil prepare to sign the Final Investment Decision in the second half of this year. The FID will mark the beginning of commercial production of oil in the Turkana Basin.
In August 2019, Kenya shipped the first 200,000 barrels of oil in an early pilot scheme. The shipment brought in KSh1.2 billion in revenue. The country is eagerly waiting to start commercial production of the highly-priced commodity in 2022.
Related:
Turkana Oil Pilot Scheme’s Audit Begins
Kenya on Course to Commercially Produce Oil by 2022 – Tullow
