Update: Swala Energy Exits Kenya’s Block 12B
Oilnews Kenya can confirm that joint venture partner in Kenya’s block 12B Australia’s Swala Energy has exited from the license as earlier reported.
According to communication from Tullow Oil the JV partner exited in October 2016 leaving the operator with 100 percent equity.
“In line with the Joint Operating Agreement (JOA), Tullow Oil has 100% participating interest in Block 12B as from October 2016,” Tullow Oil, Kenya BV communications manager Tim Tororey told OilNews Kenya.
Although no reasons were provided investigations by OilNews over the same period as compiled by HQ advisory reveal that Swala Energy was either unable to secure any funding to continue its activities or realize its assets thus very likely unable to contribute to the fulfill the commitments as per the agreement with the operator.
A statement of financial position over the period ending 24th June 2016 shows Swala Energy Kenya Limited had $2.3 million in loans of $16.5 million owed by the group against $0.1 million held by the group in various banks as per the time of the takeover by the administrator.
Although the company had entered into an arrangement for a loan capped at $3 to fund activities in Kenya and to be repaid within 10 working days of a capital raising the administrator was of the view that the company was unlikely to raise any funds before 31st December.
Explaining the company’s reasons for the financial difficulties the directors notes that the legal dispute by Otto energy really diminished the chances to attract new investors or receive commitments from third parties to partake in transactions with the company.
Swala’s complex international corporate structure was also unattractive to new investors or to raise equity augmented by the dip in the global oil and gas sector.
Trident Capital was shortlisted in late August 2016 as the preferred bidder for the acquisition of the company after the administrator advertised Swala Energy’s sale in June attracting 31 companies. Details as to how far the transaction has proceeded are not available with the deed of company arrangement set to be executed by 31st December 2016.
Swala and joint venture partners Otto Energy, Tata Petrodyne and MV Upstream are also at the risk of losing their Kilosa-Kilombero license in Tanzania with every indication they are likely to meet their commitment obligations following their ongoing dispute and court case in the Australian high court