EACOP vs Lamu pipeline

EACOP vs Lamu pipeline

Tullow Oil writes off $18 million in Kenya project assets​

TUESDAY MARCH 19 2024​



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Tullow Oil tanks at its Turkana field. FILE PHOTO | NMG


British oil explorer Tullow has written off $17.9 million (Sh2.41 billion) worth of its Kenyan assets on the uncertainty over their sale to a strategic investor and commercial exploitation of the Turkana oil deposits.

Tullow, whose field development plan (FDP) for the Lokichar project is under evaluation by the government, said that the book value of its Kenya holdings was revised downwards from $260.1 million (Sh35 billion) in December 2022 to $242.2 million (Sh32.6 billion) at the end of 2023.

The company said that there were uncertainties over its ability to realise the value— hence the impairment — primarily relating to receiving and finalising an acceptable offer from a strategic investor, obtaining financing for the Turkana project and getting the government to deliver on the required infrastructure and fiscal terms to make the project viable.

The impairment is the first the company has done since 2020 and reflects an increasingly pessimistic position on the ability of the Turkana project to proceed to commercial production. The company would require a satisfactory resolution of the issues raised before taking a final investment decision on the project, and is in the meantime proceeding with efforts to sell its stake to a new investor.

"Certain risks have increased since 31 December 2022, predominantly around farm-down and project financing. This has been partially offset by an increased equity interest in the project and changes in oil price assumptions,” said Tullow in its results for the year ended December 31, 2023.

“Based on this, the net present value [book value] has been revised to $242.2 million and an impairment of $17.9 million has been recognised as at 31 December 2023.”

Tullow’s expectation is that if the uncertainties are resolved, it will be able to write back all the impairments, which include a sum of $410 million written off in 2020. On the other hand, if they are not resolved, the company would be forced to write off the entire $242.2 million book value.

The company’s ability to unlock the value in the operation largely hinges on the approval of its field development plan, whose evaluation period was extended to June 2024 from the previous end of March date.

The field plan outlines how an oil company intends to develop a petroleum field, manage the impact on the environment and society, as well as give forecasts for production and costs. Tullow’s field development plan was initially submitted to the government in December 2021 but was later revised to make it economically viable at lower global crude oil prices.

The revised field development plan followed an audit that revealed their commercially recoverable oil reserves in Turkana are at least 14 percent larger than previously estimated. It raised the production capacity of the oilfields to 120,000 barrels of oil per day (bopd), up from previous estimates of 70,000 bopd.

In June 2023, Tullow also took up the sole ownership of the Turkana operation following the exit of its joint venture partners Africa Oil Corporation and TotalEnergies in the previous month, quoting differing internal strategic objectives as reasons.

The two firms held a 25 percent stake each in the project that comprises blocks 10BA, 10BB, and 13T in South Lokichar in Turkana, while Tullow held a 50 percent stake.

The sole ownership gives Tullow a more flexible proposition for a strategic partnership but also means that the company is now liable for all costs incurred going forward, except those that TotalEnergies and Africa Oil remain liable for.

→ cmwaniki@ke.nationmedia.com

www.theeastafrican.co.ke

Tullow Oil writes off $18 million in Kenya project assets

Tullow has written off $17.9 million (Sh2.41 billion) worth of its Kenyan assets.
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Kenya-Uganda oil tiff: Dodoma offer Kampala can’t refuse​

SATURDAY MARCH 23 2024​



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A ship docked at the port of Dar es Salaam in Tanzania. PHOTO | SHUTTERSTOCK

Tanzania has seized a momentous opportunity in the Kenya-Uganda stalemate over oil importation with a raft of offers that Kampala cannot refuse.

The EastAfrican understands that President Samia Suluhu Hassan’s government has offered to register Uganda National Oil Company (Unoc) to use the Dar es Salaam port in the importation of fuel for Uganda as Kenya sticks to its guns on Uganda’s demands.

Meanwhile, a case that Kampala lodged at the East African Court of Justice (EACJ) awaits determination, with no set timelines although various sources have indicated a willingness by Uganda to withdraw it, on which Kenya is banking.

Presidents William Ruto, Yoweri Museveni and Samia recently converged in Zanzibar -- rare tripartite meeting reportedly requested by Uganda, people close to the discussions say, to seek assurance of Uganda’s smooth importation of petroleum and other products.

www.theeastafrican.co.ke

Kenya-Uganda oil tiff: Dodoma offer Kampala can’t refuse

Tanzania has registered Unoc and waived some taxes, work permits and offered free yards at the port to enable them directly manage processes.
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Tanzania offers Uganda fresh oil import deal amid Kenya stand-off​


Tanzania oil import offer Uganda can't refuse, ship docked at Dar Port

Tanzania oil import offer Uganda can't refuse, ship docked at Dar Port.
  • Tanzania has offered the Uganda National Oil Company (Unoc) the use of the Dar es Salaam port for oil importation.
  • This presents a strategic alternative amid the ongoing importation stalemate between Uganda and Kenya.
  • The legal dispute between Uganda and Kenya over oil importation policies is pending before the East African Court of Justice (EACJ), with indications that Uganda may withdraw the case.
Tanzania has stepped forward with an enticing proposition that Kampala finds hard to ignore amind the ongoing Nairobi-Kampala oil import deadlock.

Tanzania has extended an offer to the Uganda National Oil Company (Unoc) for the utilization of the Dar es Salaam port for its fuel importation needs. This development comes as Uganda explores alternatives in response to Kenya’s steadfast position on Kampala’s oil importation demands.
Uganda’s grievance at the East African Court of Justice (EACJ) remains pending amid these unfolding events, casting a shadow of uncertainty over the diplomatic impasse.

The court has not yet scheduled the case for determination, highlighting the tensions between Uganda and Kenya over oil importation policies. Kenya is keenly anticipating Uganda’s openness to withdrawing the case, according to sources.
This legal tangle highlights the complex interplay of regional trade laws, national interests, and the vital role of the EACJ in mediating disputes within the East African Community.

In a bid to resolve the standoff and ensure the smooth importation of petroleum and other goods, Presidents William Ruto of Kenya, Yoweri Museveni of Uganda, and Samia Suluhu of Tanzania convened in Zanzibar for a rare tripartite meeting.

Initiated at Uganda’s request, this high-level dialogue set to highlight the urgency and importance of finding a mutually beneficial solution to the oil importation deadlock.

Uganda’s Unoc asked to explore oil import via Dar Port​

Tanzania’s proposal to the Unoc represents a watershed moment that could redefine the region’s energy industry. The offer from President Samia Suluhu Hassan’s administration, allowing Unoc to use the Dar es Salaam port for oil importation is strategic pivot given that Uganda’s traditional import routes through Kenya continue to face challenges.

This development not only underscores Tanzania’s increasing role as a regional trade facilitator but also highlights the growing importance of flexible, multi-nodal logistics networks in ensuring energy security and economic resilience in East Africa.

Tanzania’s initiative could significantly enhance trade flows within the EAC, fostering closer economic ties and interdependence among member states. By providing an alternative route for Uganda’s oil imports, Tanzania is not just offering a solution to a current impasse but is also paving the way for more diversified and resilient trade corridors in the region. This move could inspire similar agreements, leading to more integrated and cooperative regional trade mechanisms.

The potential rerouting of Uganda’s oil imports through the Dar es Salaam port is more than a logistical adjustment; it is a strategic move towards greater energy security within the region. With the global oil market’s volatility and the strategic imperative of ensuring a stable energy supply, Tanzania’s offer provides Uganda—and potentially other landlocked countries in the region—with a vital alternative to mitigate the risks associated with reliance on a single import route.

This diversification of import channels can protect East African countries against geopolitical tensions and logistical disruptions, ensuring a more stable energy supply.

The unfolding scenario also illustrates the critical role of diplomacy in facilitating economic development and cooperation in East Africa. The high-level talks in Zanzibar, involving leaders from Kenya, Uganda, and Tanzania, signify a collective recognition of the need for dialogue, compromise, and collaboration in addressing regional challenges.

Such diplomatic engagements are essential in crafting policies that support mutual growth, stability, and prosperity, reinforcing the notion that shared challenges require shared solutions.

As Tanzania positions itself as a key player in regional trade and diplomacy, the implications of its offer to Uganda extend far beyond the immediate logistical considerations. This gesture has the potential to catalyze broader discussions on regional infrastructure, energy security, and economic integration, marking a pivotal step towards a more connected, resilient, and prosperous EAC.

Tanzania’s proposal to Uganda, amidst the Kenya-Uganda stalemate, represents a significant shift in regional trade dynamics, offering Unoc a viable alternative through the Dar es Salaam port.

As the EACJ deliberates on the legal case, the willingness of Uganda to potentially withdraw it indicates a move towards a diplomatic resolution. The engagement of Presidents Ruto, Museveni, and Samia in Zanzibar highlights a collective effort to ensure regional stability and economic prosperity, emphasizing the importance of strategic partnerships and legal frameworks in fostering trade and diplomacy in East Africa.

theexchange.africa

Oil import deal | Tanzania and Uganda 2024 fresh oil deal

Tanzania has offered the Uganda National Oil Company (Unoc) the use of the Dar es Salaam port for oil import as stalemate with Nairobi persist.
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East African Crude Oil Pipeline (EACOP) Ltd. today signed an MoU with Ministry of Water and Environment (MWE) to cooperate on various conservation initiatives in the 10 Districts traversed by the Pipeline. As part of this cooperation, EACOP is also joining the Running Out of Trees (ROOTS) campaign.

In joining this campaign, EACOP will work with an implementing partner to plant trees on land belonging to schools, churches, the Bunyoro and Buganda Kingdoms and other institutional landowners with a focus on indigenous and fruit trees across the 10 EACOP host districts. This is in line with its commitments under the EACOP Uganda Environmental & Social Impact Assessment (ESIA).

Speaking at the signing ceremony, Mr. Martin Tiffen, Managing Director, EACOP, stated that EACOP is very pleased to be joining the ROOTS campaign, which is fully in line with our commitments to environmental and biodiversity protection & off-setting, as well as positively engaging with institutions and communities in the vicinity of our activities,

In his remarks, Mr. Alfred Okot Okidi, Permanent Secretary (PS), MWE stated that, “The Ministry through its directorates has been engaged in the Environment and Social Impact Assessments and will be instrumental in completing the cycle of mitigating the predicted impacts and will provide the necessary support for the successful implementation of conservation initiatives in the Project‘s area of influence.”

The signing, which marked the commencement of the ROOTS campaign, was concluded by a tree planting ceremony at the Ministry.

Details : East African Crude Oil Pipeline (EACOP) Ltd. today signed an MoU with Ministry of Water and Environment (MWE) to cooperate on various conservation initiatives in the 10 Districts traversed by the Pipeline. As part of this cooperation, EACOP is also joining the Running Out of Trees (ROOTS) campaign. – EACOP –

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