UK based oil and gas company, Tullow Oil Plc, has agreed to sell its entire stake in Kenya’s oil assets to Gulf Energy Limited in a deal worth at least $120 million.
The sale marks Tullow’s exit from the East African country as it continues efforts to reduce its net debt, which stood at around $1.5 billion at the end of 2024.
In a statement released on Tuesday, the company said it would receive three separate payments of $40 million, totaling $120 million.
Tullow will also retain a right to a 30% free carried interest in any future development phases and will be entitled to additional royalty payments.
Earlies Kenya’s Lokichar oilfield development delayed he assets being sold include the Lokichar oilfield project in northwest Kenya, which has struggled to reach full production due to infrastructure challenges.
Experts say the project would require the construction of a heated crude pipeline stretching hundreds of kilometers to the coast before commercial output can begin.
Tullow became the sole owner of the Lokichar field in 2023 after previous partners, TotalEnergies and Africa Oil Corp pulled out. The company had been in talks with Indian state run firms for a potential sale, but those discussions fell through.
Tullow noted that the Kenya assets were no longer a core part of its strategy, especially after a $145 million write off recorded last year.
The deal with Gulf Energy is expected to provide financial relief and allow the company to focus on its more productive West African operations.
The sale is the latest in a series of divestments by Tullow aimed at stabilizing its finances.
Last month, the company announced a $300 million sale of its Gabon assets, also as part of its debt reduction plan.
According to data from the London Stock Exchange, Tullow had a market capitalization of roughly $255 million as of Tuesday, significantly lower than its outstanding debt.
The company said it remains committed to simplifying its portfolio and maximizing value from its core assets.
The Kenya transaction is subject to regulatory approvals and is expected to close within the coming months.
