Yes, we’re broke but not out; our focus is on FID by year end

Tullow Kenya managing director Martin Mbogo at an interview in the capital Nairobi on February 20, 2020. PHOTO | SILA KIPLAGAT | NMG Some of our joint venture partners did not approve their budgets for 2019, and also this year. This saw Tullow spend above our shareholding agreement, pushing our expenditures up.

At group level, we have stated that we had to reduce production forecast in our cash generating assets. This means that our revenue was going to be less this year. Prudent management required that we adjust with that reality.

However, the Kenyan unit is least impacted because we have the budget to get through to the Financial Investment Decision (FID).

Tullow, the British oil company driving Kenya and Uganda’s exploration, is in financial trouble, and is laying off some employees. The managing director Martin Mbogo spoke to Saturday Nation’s Paul Wafula and Allan Olingo about the firm’s future.

Tullow Kenya is selling part of its stake in the Turkana project. How much of it are you selling and who are you looking to bring on board?

We are willing to reduce our holding in the current licences from 50 per cent to 30 per cent. We would prefer to do this before the Final Investment Decision. The process has started and we are doing it with our partners who are also selling down. This doesn’t mean that we are reducing our commitment to the project. It is just a portfolio management issue. I am not at liberty to disclose whom we are in discussions with.

We expect to use the proceeds to cover costs incurred and reinvest part of it to take the project forward. It is not a reflection of our financial position, but of the maturity of the project.

Are Chinese firms among the investors you are having discussions with?

Allow me not to comment on that. However, the Chinese bidders for the stake are not off the table. We have signed non-disclosure agreements on the same with the interested parties, so I have to respect that. We are looking for the profile of a firm that has the commercial interest of the project at heart. We are also looking for firms with the capability to deliver on the unique circumstances of the Kenyan onshore activity, and who have proven experience in this. Our expectation is that by mid-year we will have better clarity on those […]

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