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<\/figure>\n\n\n\nThe project was also notably absent in its fourth quarter results and drilling operations update this February as well as the production and operational update in January 2023. While Africa Oil terms Project Oil Kenya as a critical step towards the FID the tone has changed over time to a less optimistic one. “There is no guarantee that the Company can successfully conclude a farmout to new strategic partner(s) on favorable terms.”<\/p>\n\n\n\n It is not clear whether the Kenyan blues could have been motivated by an ongoing legal tussle with the Kenya Revenue Authority over the company’s farmout to Tullow Oil and Total Energies in 2012 and 2017 respectively in relation to KRA’s corporate income tax and value added tax assessments. In November last year Africa Oil’s VAT assessment was partly successful and the High Court concluded that the Company owes VAT in an amount of Kenyan\u00a0Shillings 2,293,334,065\u00a0(approximately\u00a0US$ 18.7 million) while KRA’s appeal with regard to the CIT decision was partly successful and the High Court concluded that the KRA was correct to disallow certain costs claimed by the Company. Following the ruling Africa Oil said the High Court’s decision on the KRA’s appeal with regards to CIT was not expected to have a material cashflow impact to the Company although it said it was taking legal advice on the options available to it in view of this decision, including the option to appeal.<\/p>\n\n\n\n The announcement by Tullow Oil on its forecast capital expenditure for Kenya c.$10 million and c.$30 million on exploration and appraisal activities will however be consoling for players in the upstream sector with little or no activity expected in other projects both onshore and offshore. Tullow Oil also notably reffered to ongoing efforts to <\/em>“secure a strategic partner for the Kenya development project” in its latest full year results released last week. Its decision to seek an extension of the Field Development Plan (FDP) review period, while constructive discussions with the Energy and Petroleum Regulatory Authority of Kenya and the Ministry of Energy and Petroleum last November could also indicate the explorer was also facing challenges executing the farm-out. Earlier reports had indicated that a consortium of state-run ONGC Videsh Ltd (OVL) and Indian Oil Corp. Ltd (IOCL) were interested in the Kenyan blocks.<\/p>\n\n\n\n Africa Oil holds 25% in blocks 10BB and 13T while Tullow Oil plc. (50% Operator) and TotalEnergies (25%).<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/03\/image-1.png?resize=994%2C563&ssl=1\")
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