Table of Contents
Key Points
- Tullow Oil slashed the value of its Kenyan assets to $112.2 million, raising doubts over the long-delayed Turkana oil project’s commercial viability.
- The company faces setbacks in attracting a strategic partner and finalizing infrastructure and fiscal terms needed to move the project forward.
- An international tribunal ruled Tullow is not liable for a $320 million tax claim, but two other disputes with Ghana remain unresolved.
Tullow Oil Plc, the London-listed oil and gas explorer in which Gabonese oil magnate Samuel Dossou-Aworet holds a significant stake, has written off another $145.4 million from its Kenyan assets. This underscores growing doubts about whether the company can push its long-delayed Turkana oil project to commercial production.
The latest write-down reduces the value of Tullow’s Kenyan assets from $253.3 million to $112.2 million. It follows a similar adjustment last year, when the company lowered the valuation from $260.1 million in December 2022 to $242.2 million by the end of 2023.
Tullow’s Kenya oil plan faces setbacks
Tullow has been struggling to secure a strategic partner and financing for the project while waiting on the Kenyan government to finalize infrastructure plans and fiscal terms that would make the venture viable. The company acknowledged these challenges, stating:
"Despite the delays associated with securing governmental approval and a strategic partner, Kenya remains a material option to drive value and growth and we are continuing to work with the Kenyan government to seek support for a Field Development Plan (FDP) and identify a long-term strategic partner, which is a key milestone to achieve a Final Investment Decision (FID)."
So far in 2024, Tullow has written off a total of $213 million in exploration costs—up from $27 million in 2023. The bulk of that comes from Kenya, where the extension of the FDP review deadline to June 2025 prompted a reassessment of the risks, leading to the $145 million impairment.
The company also wrote off $39 million in Argentina and $16 million in Côte d’Ivoire due to the expiration of licenses with no planned investment. Additionally, it recorded a $10 million write-off for the Sarafina well at Simba, in Gabon.
Tullow stays active in Africa’s oil
Despite these setbacks, Tullow remains active in Africa, with its primary focus on producing oil fields in Ghana, Gabon, and Côte d’Ivoire, alongside its discovered resources in Kenya.
Dossou-Aworet, the founder of Petrolin Group, has played a key role in Africa’s oil and gas sector since 1992, building a portfolio of major energy deals across the continent. His 16.8 percent stake in Tullow—243,635,633 shares—is currently valued at $50 million, down from $86 million in September 2024.
Earlier this year, Tullow scored a major victory in a tax arbitration case. An international tribunal ruled that the company was not liable for a $320 million tax assessment imposed by the Ghana Revenue Authority. The case involved Tullow’s operations in the Deepwater Tano and West Cape Three Points Petroleum Agreements, covering the Jubilee and TEN oil fields.
The ruling clears Tullow Ghana of the tax burden and shields it from similar claims under these agreements. However, the company is still engaged in two other tax disputes with the Ghanaian government, which were referred to the ICC in February 2023, with both sides working toward a resolution.
