LONDON: Tullow Oil plc announced Monday that its subsidiary, Tullow Overseas Holdings BV, has agreed to sell its Kenyan operations to Gulf Energy Ltd. for a minimum of $120 million.
The deal includes an initial $40 million payment upon completion, followed by two additional $40 million payments tied to project milestones. Tullow will also receive potential royalty payments and retains a 30% back-in right for future development phases at no cost.
The sale accelerates Tullow’s debt reduction strategy and follows its recent $300 million divestment of assets in Gabon. The transaction requires regulatory approvals and finalized agreements, with completion expected in 2025.
“This strengthens our financial position and maintains our stake in Kenya’s potential,” said Richard Miller, Tullow’s CFO and interim CEO. He praised Gulf Energy as a “credible partner” to advance Kenya’s energy sector.
All liabilities will transfer to Gulf Energy, which must provide payment guarantees for deferred installments. Tullow will update shareholders as the deal progresses.