British Oil explorer Tullow has announced its exit from Kenya following the receipt of KES5.2 billion ($40 million) from  Auron Energy E&P Ltd, an afiliate of Gulf Energy Ltd.

The payment seals  Tulllow Oil Plc's successful completion of the sale of its entire working interest in Kenya in line with all the transaction conditions set out between the two parties' Sale and Purchase Agreement (SPA), which was announced on 21 July, this year.

In a market update at the London Stock Exchange, Tullow Oil PLC said it has received the full proceeds from Auron Energy E&P, effectively allowing the company to offer its entire stake in Kenya.

“The transaction represents the sale of 100 percent of the shares in Tullow’s subsidiary Tullow Kenya BV, which holds Tullow’s entire working interests in Kenya, for a minimum cash consideration of $120 million, subject to customary adjustments,” Tullow Kenya BV Managing Director Madhan Srinivasan noted. 

He added that the transaction proceeds will be used to strengthen Tullow’s balance sheet. However, Tullow Oil will retain royalty payments, subject to certain conditions, and a no-cost back-in right for a 30 percent participation in potential future development phases.

He further expressed TKBV’s gratitude to various arms and agencies of the Government of Kenya, including the Ministry of Energy and Petroleum, the Energy and Petroleum Regulatory Authority (EPRA), and the County Government of Turkana, among others, for their support since 2011.

“After 14 years in Kenya, Tullow leaves behind strong assets, and we are delighted to pass the baton to Gulf Energy, a capable Kenyan company, in the lead up to first oil, making Kenya an oil-producing country. We are very grateful for the support and co-operation extended to TKBV by various stakeholders in the Government of Kenya,” he said.

On his part, Gulf Energy Ltd Chief Executive Officer Paul Limoh said: “We are delighted to complete this transaction and to bring these assets under the stewardship of Gulf Energy Ltd. This project will play a crucial role in advancing Kenya’s domestic energy sector, creating opportunities for growth and development in the Turkana region, while also supporting the country’s long-term energy security. We thank Tullow for its years of investment and commitment, and we look forward to building on that foundation as we work with partners and stakeholders to take the project forward.”

Ian Perks, Chief Executive Officer of Tullow, commented: “The successful completion of this transaction marks a significant milestone for the company and the achievement of another one of our key 2025 strategic priorities. The use of proceeds helps to further strengthen our balance sheet, and I would like to thank the team for their hard work and commitment, which have helped position the company strongly as we look to refinance our capital structure this year. On behalf of everyone at Tullow, I extend our best wishes to the people and Government of Kenya and wish Gulf Energy every success as they advance this project.”