Total and Tullow launch joint sale of stakes in Kenyan oil project -sources

Meren Energy

23/01/2020 10:51

* Tullow willing to sell entire 50% stake 
    * Total aims to reduce stake from 25% to 15%
    * Project launch faces delay 
    * Tullow under pressure after problems in Guyana and Ghana 

    By Ron Bousso, Bate Felix and Shadia Nasralla
    LONDON/ PARIS, Jan 23 (Reuters) - Total  TOTF.PA  and Tullow
Oil  TLW.L  aim to reduce their stakes in Kenya's first oil
development with a joint sale that could see Tullow exit
completely amid uncertainty over the project's launch, banking
and industry sources said.
    The two oil and gas producers have hired French bank Natixis
to run the joint sale process for Blocks 10 BA, 10 BB and 13T in
the South Lokichar Basin, the sources said.
    London-listed Tullow, which operates the project, last year
indicated it intended to sell up to 20% of its 50% stake in the
blocks. However, the sources said it is now willing to sell the
entire stake after disappointing exploration results in Guyana
and production problems in Ghana that prompted the ousting of
its chief executive and wiped out nearly half of the company's
market value.  urn:newsml:reuters.com:*:nFWN29J1EY urn:newsml:reuters.com:*:nL4N28J1UD
    French oil major Total, meanwhile, aims to sell up to half
of its 25% stake in the Kenyan project, the sources said.
    Tullow, Total and Natixis declined to comment.
    The entire project is valued at between $1.25 billion to $2
billion, but it is hard to be precise because the development
has yet to receive a final investment decision (FID), two of the
sources said.
    Tullow this month said it was still targeting FID by the end
of 2020, with production starting in 2022, describing the
timeline as "challenging".  urn:newsml:reuters.com:*:nS8N26L062
    The fields already produce about 2,000 barrels of oil per
day as part of an early production system. The oil is trucked
from Turkana to the port city of Mombasa. A first cargo of
250,000 barrels was shipped on a tanker last August. urn:newsml:reuters.com:*:nL5N25M14D
    The project partners have also agreed with the Kenyan
government to develop a crude oil pipeline from Lokichar to Lamu
on Kenya's coast.
    Tullow and Toronto-listed Africa Oil  AOI.TO , which holds a
25% stake in the blocks, first discovered crude oil in the
Lokichar basin in 2012. Tullow estimates the fields contain 560
million barrels in proven and probable reserves and expects them
to produce up to 100,000 barrels per day from 2022.
    

 (Reporting by Ron Bousso
Editing by David Goodman)
 ((ron.bousso@thomsonreuters.com; +44 (0) 2075422161; Reuters
Messaging: ron.bousso.reuters.com@reuters.net))