UK-based oil and gas company Tullow Oil has received Ksh 4.6 billion as part of the second instalment from the sale of its Kenya assets to Auron Energy E&P Limited.
The payment follows the National Assembly’s approval of the Field Development Plan (FDP) for the South Lokichar oil project, a significant step toward the potential commercial production of oil in northern Kenya.
The payment is also part of the Sale and Purchase Agreement (SPA) announced in July 2025, under which Tullow agreed to sell its entire working interest in Kenya to Auron Energy, an affiliate of Gulf Energy Limited.
“Tullow Oil plc (Tullow) is pleased to announce it has received $36 million proceeds of the Tranche B payment, under the terms of the Sale and Purchase Agreement (SPA) announced on 21 July 2025 for the sale of its entire working interest in Kenya to Auron Energy E&P Limited, an affiliate of Gulf Energy Limited,” read the statement.
Tullow Oil Second Payment to Exit Kenya
The $36 million payment represents the second tranche under the agreement for the disposal of Tullow’s Kenyan operations.
Also Read: Gulf Energy to Pump KSh774 Billion into Turkana Oil, Eyes Production by December 2026
Tullow had earlier agreed to sell its stake as part of efforts to strengthen its balance sheet and focus on its core producing assets, particularly in West Africa.
The company previously led oil exploration and appraisal in the South Lokichar Basin in Turkana County, where oil deposits were discovered.
According to the company, the remaining 10% of Tranche B proceeds, valued at $4 million, will be paid upon completion of the transition support services related to the handover of operations.
This process is expected to be completed before the end of March 2026.
Final Payment Structure and Agreement Rights
Despite selling its entire working interest, Tullow will continue to have future financial exposure to the project.
Under the agreement, the company is expected to receive a final tranche of $40 million, payable over five years beginning in the third quarter of 2028 and ending no later than 30 June 2033.
The company retains certain strategic rights in the project. These include royalty payments tied to future oil production, subject to specific conditions outlined in the agreement.
Also Read: Tullow Oil Exits Kenya After Ksh15.5 Billion Buyout
Tullow also maintains a no-cost back-in option that will allow it to rejoin potential future development phases with up to 30 percent participation if the project expands.
Oil Price to Boost Cash Flow
Tullow also issued an update on its 2026 financial outlook, noting that higher global oil prices could improve its cash flow.
The company had earlier projected pre-financing cash flow of between $150 million and $180 million for 2026, based on an assumed oil price of $65 per barrel.
However, the company noted that based on actual oil prices recorded in January and February 2026, combined with an assumed average oil price of $100 per barrel for the rest of the year, its projected that cash flow could double compared to the original guidance.
Higher oil prices have supported improved revenues for many global energy companies, particularly those with producing assets in regions such as West Africa and the North Sea, where Tullow operates.
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