British explorer Tullow Oil which held the license to exploration Block 10 in Northern Kenya’s Marsabit county has booked a 6.8 billion shilling loss after losing the expired permit.
Block 10 which was licensed to tullow and its partner African Oil which had 30 percent stake saw Tullow’s loss add to a total of 21 billion shillings that the group lost putting in consideration to expenditure and changes to future work programmes.
“The Group has written off $280 million (Sh21 billion) in relation to prior years expenditure and fair value adjustments as a result of licence relinquishment and changes to future work programmes. These included write-offs in Kenya ($79 million) (Sh6.8 billion) due to the relinquishment of Block 10A,” Tullow said in its annual report.
The explorer has however said it will drill another 40 exploratory wells in 2014/15 even as Tullow Kenya manager said that the company could still bid for the license which is now in the government’s hands while its partner African Oil has forsaken its interest in the area.
“The partnership has elected not to continue into the next exploration phase in Block 10A in Kenya and the previously planned test of the Paipai well has been cancelled due to concerns over economic viability,” Africa Oil was quoted by Business daily.
In total Tullow Oil Plc profits dipped from 57 billion in 2012 to just 18.66 billion shillings a drop of over 60 percent.
The British firm did not indicate how much money it will spend in Kenya, but said that it has set aside $1 billion (Sh87 billion) for exploration in Mauritania, Norway, Kenya and Ethiopia and Guinea.