TotalEnergies SE and Africa Oil Corp. are abandoning a project in Kenya, increasing challenges for operator Tullow Oil Plc following a yearslong effort to get the development off the ground.
(Bloomberg) — TotalEnergies SE and Africa Oil Corp. are abandoning a project in Kenya, increasing challenges for operator Tullow Oil Plc following a yearslong effort to get the development off the ground.
Tullow found crude in the East African country more than a decade ago, but commercial extraction is yet to begin as it’s failed to find an additional partner and Kenya’s government has been slow to approve a development plan. With Total and Africa Oil now exiting, Tullow is left on its own to get the project under way.
The company’s two partners in the country will “issue notices of withdrawal from Blocks 10BB, 13T and 10BA in the South Lokichar Basin for differing internal strategic reasons,” Tullow said Tuesday in a statement. “As a result, Tullow’s working interest in these blocks will increase from 50% to 100%.”
The company’s shares sank as much as 3.9% to 23.94 pence at the open in London.
Africa Oil released a separate statement, saying its “strategy has shifted to focus on production and high-potential exploration opportunities” elsewhere. Total didn’t immediately respond to a request for comment.
Read More: Tullow Oil Seeks Growth From Existing Fields as Kenya on Hold
Tullow is continuing its search for a partner and said the change in shareholdings gives it “more flexibility” in that process. “Detailed farmout discussions continue with a number of companies,” it said, adding that it’s still hoping to secure a strategic partnership this year.
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