Tullow Oil will turn its attention to farming down its stake in the South Lokichar basin onshore Kenya in the first half of next year, as the company remains on course for a long-awaited project sanction within the next year.
The Anglo-Irish independent is aiming to farm down a portion of its 50% stake in a trio of blocks – 10BA, 10BB and 13T – to around the 30% mark. Its partners in the blocks are French supermajor Total and Africa Oil. It also has a 100% stake in Block 12B.
Block 10BB contains the Amosing and Ngamia fields, while Block 13T contains the Twiga field – the three fields that form the foundation stage of its proposed South Lokichar basin oilfield development.
A final investment decision for that development had, as of the middle of this year, been expected in 2019. However, in July Tullow pushed that out until the second half of 2020.
Speaking to Upstream on the sidelines of the Africa Oil Week conference in Cape Town on Wednesday, Tullow chief executive Paul McDade said the company remains committed to farming down before sanction – something the Nairobi administration is aware of.
“It is more likely to be a first half of 2020 activity and the target is just to make sure it is done before the FID,” McDade said of the company’s plan to begin the farmdown process.
“The key objective is, when you get to FID, you want to have the right partnership to invest in the project – that is ultimately our objective.”
The London-headquartered independent has already completed front-end engineering and design studies for both the upstream and pipeline components of the development, the foundation stage of which will see production of between 60,000 and 80,000 barrels per day.
Tullow anticipates that first oil from the full field development will come around three years after a final investment decision.
In neighbouring Uganda, Tullow remains intent on farming down a portion of its one-third stake in the Lake Albert proposed development, which awaits sanction.
A $900 million farmdown deal to partners Total and CNOOC International in equal measure fell through recently, with the partners halting all work on the scheme – which involves the development of the Tilenga and Kingfisher fields.
“We are not going to change our strategy in Uganda, which is to bring our equity down to a much lower level (and) to use in some shape or form the equity we are selling to fund the equity we are retaining,” McDade said.
“A future deal is probably going to have a similar structure where we look in some way to make Uganda self-funding.”