Oil explorer Tullow Oil is gearing up for a significant investment in Kenya, with plans to inject Kes1.43 billion ($10 million) into the country this year.

This decision follows the receipt of formal notification from the Energy and Petroleum Regulatory Authority, extending the review period of the updated Field Development Plan (FDP) to June 30.

Tullow Kenya BV (TKBV) Managing Director, Mr. Madhan Srinivasan, revealed that an updated FDP was submitted to the Kenyan government in March 2023.

This plan aims to develop 470 million barrels of oil equivalent resources to produce up to 120 thousand barrels of oil per day.

In addition to advancing the FDP, TKBV Tullow is collaborating with the Government to explore options that could accelerate production and cash flow, thereby unlocking more value from the local asset.

These options, according to Madhan, are being discussed with the government and will complement Tullow’s Full Field Development (FFD) plan for Project Oil Kenya.

"We are collaboratively working with the Government of Kenya as they evaluate the FDP. Once their evaluation is concluded, the FDP will be submitted to the Cabinet Secretary for Energy and Petroleum for review before submission to Parliament for final approval. The development has been designed to be robust at lower oil prices, and we continue discussions with prospective strategic partners for this project," said Madhan.

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Tullow Oil 2023 performance

Tullow Oil plc's 2023 performance report reflects positive strides towards achieving its goals and improving its business.

The company registeres several significant milestones, including the successful start-up of Jubilee South East, which contributed to material production growth.

Tullow generated $170 million in operating revenue, surpassing expectations, and reduced net debt by over $250 million.

Furthermore, Tullow secured a $400 million in debt from the United Kingdom’s Glencore Energy, demonstrating its ability to access long-term funding.

The company remains on track to deliver production growth in 2024 and expects to generate $800 million in free cash flow from 2023 to 2025.

Kenya remains a key focus area for Tullow, with the country offering substantial opportunities for value creation and growth.

Tullow's contingent resource in Kenya has doubled to 470 million barrels, and the company now holds 100 percent of the license, with an FDP under discussion with authorities in Kenya. This increased interest provides Tullow with greater strategic flexibility.

Tullow Oil plc's Chief Executive Officer, Rahul Dhir, described 2023 as a year of several achievements and highlighted the firm's transformation over the past few years.

"Since I joined Tullow in July 2020, we implemented a plan to transform our business. This plan is achieving targeted results, and since the end of 2020, we have generated over $1.1 billion of free cash flow, reduced net debt by over 30 percent, and taken the business from peak gearing of 3x to 1.4x net debt to EBITDAX," said Dhir.

He added, "In line with our strategy, we continue to focus relentlessly on operational excellence, capital efficiency, and investments to drive growth.

"This strategy is delivering material cash flow generation, and we are on track to deliver our target of c.$800 million free cash flow over the 2023 to 2025 period. With a strong balance sheet and this sustainable free cash flow outlook, Tullow has a strong and unique foundation to create material value for our investors, host nations, and stakeholders, and we confidently look to the future."

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