Tullow Oil has unveiled a US $5 million capital expenditure plan for oil development in Kenya this year. This was revealed during its January Trading Statement and Operational Update this week.
The British multinational oil and gas exploration firm estimates that its capital expenditure for 2022 will total US $350 million. This comes at a time it is seeking strategic partners for development of three oil blocks in Turkana County.
Tullow says discussions are ongoing with interested parties under the Project Oil Kenya JV Partners.
“The JV Partners continue to seek a strategic partner for this project and constructive discussions continue with interested parties.”
“In December 2021 the Project Oil Kenya JV Partners submitted a Field Development Plan for the 10BB and 13T licences, including the additional exploration and appraisal opportunities within the 10BB and 13T licences. The exploration and appraisal plan for 10BA was also submitted,” said the firm in a statement.
The plan was part of the licence extension obligations provided by the Government of Kenya when it extended the company’s exploration licences in late 2020.
Tullow Oil has 50 per cent stake on blocks 10BB, 10BA and 13T under the joint venture.
The US $5 million capital expenditure for Kenya is substantially lower compared to Ghana where the firm has lined up the biggest chunk of investment at $270 million in what the firm says has been prompted by investment in infrastructure for the Jubilee North East and South East areas where it expects meaningful growth in production beginning 2023.
The firm targets to spend another US $30 million on non-operated portfolio and another US $45 million on exploration and appraisal.
“In 2022, we will build on these firm foundations and focus on investing in our producing assets in West Africa. Our plans in Ghana, where we are in the process of increasing our stakes in both the Jubilee and TEN fields, will position us to deliver the free cash flow to reduce gearing to less than 1.5x by 2025,” Tullow Oil plc Chief Executive Officer Rahul Dhir said.
Decommissioning expenditure is estimated at $100 million.
Revenue is expected to be $1.3 billion with a realised oil price of US $63 per barrel, including hedge costs of US $150 million while capital and decommissioning expenditure is estimated at US $265 million and US $70 million respectively.
Tullow says it is still keen on reducing its debt portfolio as year-end net debt last year reduced to $2.1 billion from $2.4 billion in 2020.
The projections which are yet to be audited are a precursor to the group’s full year results slated for March 2022.
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