Tullow Oil Loss: Tullow Oil has reported a full year 2019 loss of a shocking Sh. 169 billion. The British oil explorer who has been at the centre of Kenya’s oilfields made the loss amidst bankruptcy fears.
The full-year loss posted by Tullow was fueled by exploration write-offs and impairments totalling about Sh. 200 billion, including a revised write-off from its assets in Uganda.
Tullow Oil slaps Kenya with Sh. 204 billion compensation fee
“This has been an intense period for Tullow as we have worked hard on a thorough review of the business which has led to clear conclusions and decisive actions,” said executive chair Dorothy Thompson.
The loss came as the London Stock Exchange listed oil explorer slapped Kenya with a Sh. 204 billion demand. The oil explorer is asking for the money as compensation fee for the six years of exploration it has conducted in Turkana oilfields.
According to a report that appeared in the Business Daily on Wednesday, Tullow requires commitment from the government that Kenya owes the firm $2 billion (Sh. 204 billion) and wants to use the pledge to sweeten the offer for sale of its stake.
“Tullow, which has a 50 percent stake in blocks 10 BA, 10 BB and 13T in the South Lokichar Basin, submitted the compensation bill last week” says the report. The report further says that Tullow Oil, which is facing financial difficulties will be thrown deeper into turmoil should Kenya fail to pay up.
“Oil firms recover their exploration costs over years once production and sale of the commodity start, which in Kenya’s case is planned for 2022. The disagreement over the bill also adds to Tullow’s financial constraints that have seen the firm plan to cut a third of its staff to save about $20 million after being hit by weak output in Ghana, delays in East Africa and lower-than-hoped-for oil quality in Guyana,” it says.