Africa Oil Corp has announced that Tullow Oil Kenya B.V., the operating partner on Blocks 10BB and 13T in Kenya, has today submitted notices of force majeure to the Kenyan Ministry of Petroleum and Mining on behalf of the joint venture partners in these blocks. View PDF version.
These declarations are the result of impact of the COVID-19 pandemic on the operations, including Kenyan government’s restrictions on domestic and international travel, and recent tax changes that adversely impact the project economics.
These are exacerbated by the recent unprecedented crash in global crude oil prices.
Declaration of force majeure allows time for an improvement in the operating environment and for the joint venture partners, to discuss with the government of Kenya the best way forward for this strategic project.
Tullow Oil has been facing harsh economic times after oil discovery in Kenya and Uganda.
Tullow Oil’s entire stake in jointly-held onshore oil fields in Uganda for $575 million was sold to Total, as it strives to raise $1 billion this year to reduce its $2.8 billion debt.
Tullow suffered a series of technical difficulties and missed production targets, leading its chief executive to step down last year.
Now, it faces unprecedented challenges in the oil markets as lockdowns to contain the new coronavirus have wiped out demand and the international oil price has lost roughly two thirds of its value since the start of the year.