Canadian oil company Africa Oil expects the proposed sale of its stake and that of its partners in the Tullow oil project to close in just over a fortnight.
The deal would afford Africa Oil and its partner, British oil and gas exploration and production firm Tullow oil as well as French giant Total Energies SE, the much-needed cushion against risks for the multi-billion-shilling project.
This will finally pave the way for commercialising the project, which would consequently lead the way for necessary approvals from the State and, subsequently, the planned development of a pipeline and oil processing facility in the basin that includes $3.4 billion (Sh408 billion) investment for upstream activities.
Africa Oil Chief Executive Keith Hill did not name the companies involved in the expected deal even as he insisted a deal would be forthcoming this month.
“I think it’s going to be done by the end of this month, however there too many moving parts that bring about uncertainties. If you had asked me in June, I would say by the end of this month. If you asked me in 2019, I would say I think it would be done by the end of the month,” Keith Hill at an investor briefing.
Tullow oil is the current operator of the project with a 50 per cent stake, while partners Africa Oil Corporation and French Total Energies SE hold 25 per cent each.
The looming closure of a potential deal gives hope for the revival of Kenya’s aspiration to export oil on a commercial scale since Tullow discovered crude in the country in 2012. At the earlier estimated value of over Sh360 billion, it will be one of the biggest deals in Kenya’s history.
Once the deal has been completed, the companies could drill more exploration wells which will double the size of assets from around 500 million barrels to one billion.
Tullow and Africa Oil earlier planned to sell a significant chunk of their stakes in the blocks after hitting financial hurdles, while Total aimed to sell up to half of its 25 per cent stake.