Africa Oil Corp announced that Tullow Oil had submitted notices of force majeure to the petroleum ministry. The notices, according to a news release from Africa Oil Corp, are as a result of the impact of COVID-19 Pandemic, which has affected the company’s operations. Further developments such as tax changes and travel restrictions have impacted the projects’ economics. In addition, dropping global crude oil prices have worsened Tullow’s operations.
“These declarations are the result of the impact of the COVID-19 pandemic on the operations, including Kenyan government’s restrictions on domestic and international travel, and recent tax changes that adversely impact the project economics,” read a statement from the Company.
The statement of force majeure is forward-looking, which seeks to clarify the position of Tullow Oil in the project, owing to present and future developments.
SEE ALSO: Tullow Oil Set to Lay Off 650 Staff
The notices create room for discussions for the future of the drilling Blocks 10BB and 13T. At the same time, the notices give room for improvement in the operating environment.
However, the statement warns that all information surrounding the force majeure is forward-looking and therefore involves discussions around predictions. Therefore, there is no telling whether discussions with the Government of Kenya will result in a satisfactory outcome. There could be possible modification or cessation of the Company’s Kenyan project.
“Forward-looking information includes but is not limited to the Company’s position that the operating environment, adversely impacted by the COVID-19 Pandemic, will improve the potential outcome of discussions between Africa Oil, its partners, and Government of Kenya. There is no certainty such discussions with the Government of Kenya will result in a satisfactory outcome and may result in the Company’s Kenyan project being significantly modified or ceased in its entirety,” read the statement.
