Tullow Oil is edging closer to a full exit from Kenya’s oil exploration sector after signing a sales and purchase agreement with Gulf Energy, marking a significant step in its debt-reduction strategy. The U.K.-listed oil and gas company announced on Monday that it has finalized a deal to sell its Kenyan assets for at least $120 million (approximately Ksh.15.5 billion).
The deal, executed with Gulf affiliate Auron Energy E&P Ltd., involves an upfront payment of $40 million upon completion in 2024, with the remainder to be paid over the coming years. Tullow will retain a financial interest in the project through royalty payments and will have the right to participate in up to 30 percent of any future development phases at no cost.
“This transaction is a milestone in our efforts to streamline operations and strengthen our balance sheet,” said Madhan Srinivasan, managing director of Tullow Kenya BV, in a statement.
Tullow’s decision to offload its Kenyan oilfields comes after years of challenges in commercializing the oil discovered in Turkana County in 2012. Despite being hailed as a breakthrough at the time, the project has faced persistent financing hurdles particularly the need to build a heated pipeline to transport crude oil from the Lokichar Basin to Kenya’s coast.
The situation worsened in May 2023 when Tullow’s joint venture partners, TotalEnergies and Africa Oil Corp, pulled out of the Lokichar project, leaving Tullow as the sole stakeholder. Talks with Indian state-owned firms to offload the assets failed to produce a deal, further complicating the company’s position.
Tullow’s move in Kenya is part of a broader divestment strategy. In March 2025, the company agreed to sell its Gabonese assets for $300 million. Combined with the Kenya sale, Tullow expects to raise $380 million in cash next year.
Tullow’s Chief Financial Officer and interim CEO Richard Miller said the proceeds would significantly reduce the firm’s net debt, which stood at around $1.5 billion at the end of 2024.
With this latest transaction, Tullow aims to refocus on core assets while stabilizing its financial position.
