The National Assembly has expressed serious concerns about the recent sale of Tullow Oil’s assets to Gulf Energy, a Nairobi-based oil and gas trading firm. The deal, valued at Ksh15 billion (about $120 million), has raised questions due to the lack of clear information shared with the public and policymakers.
In a report by the National Assembly Energy Committee, members pointed out that there is limited transparency about the exit terms, how this deal affects Kenya’s chances of benefiting commercially from its oil resources, and what it means for the approval of the Field Development Plan, which has been pending for years.
Tullow Oil officially ended its ten-year effort to develop oil discoveries in Kenya by selling inland fields to Gulf Energy. The company had already announced its intention to sell its stake in Kenya in an effort to reduce its global debt to below $1 billion (Ksh129 billion).
The agreed payment structure allows Tullow to receive about Ksh14.9 billion in instalments, each amounting to roughly Ksh5.3 billion. This staged payment approach raises concerns over the stability and seriousness of the deal, especially given the country’s fragile oil development progress.
Another part of the deal gives Tullow access to future payments through royalties if oil production starts in Kenya. The British oil firm also retained the right to join in future developments in the country without having to spend more money upfront.
This means that while Tullow is technically leaving, it could still benefit financially from Kenya’s oil resources without directly investing in infrastructure or operations anymore.Tullow says the sale is moving forward as expected.
The company mentioned that it expects to receive the first two instalments totalling $80 million (Ksh10.3 billion) sometime in 2025. Despite this optimism, many in Kenya see this as a major setback for the country’s goal of becoming a serious player in the global oil market.
The Lokichar Basin in northern Kenya was believed to be the heart of Kenya’s oil future. With Tullow’s exit, that dream has been pushed further out of reach.
One of the biggest problems that Kenya has faced is the lack of infrastructure. The country still does not have a proper oil pipeline to transport crude from Turkana to the coast for export. This missing link has held back progress and made it harder to attract serious investors.
The failure to approve the Field Development Plan also created delays and uncertainty. When TotalEnergies SE and Africa Oil Corp., Tullow’s partners in the venture, pulled out in 2023, Tullow was left without a strong replacement to move the project forward.
Now with Gulf Energy stepping in, there is little clarity about how the company plans to overcome the same hurdles that caused problems for Tullow. The National Assembly wants more answers about the transaction and whether Gulf Energy has the technical and financial ability to deliver results where others failed.
As it stands, this deal appears to benefit Tullow more than Kenya, leaving the country to deal with unfinished plans, poor infrastructure, and a fading dream of becoming an oil-exporting nation.