Tullow Oil has received the $36 million Tranche B payment from the sale of its entire working interest in Kenya’s South Lokichar oil project, bringing the embattled British explorer one step closer to exiting the East African country it has spent more than a decade trying to develop commercially.
The payment, made under a Sale and Purchase Agreement signed on 21 July 2025, follows the ratification by Kenya’s Parliament of the Field Development Plan for the South Lokichar project — a milestone that unlocked the second tranche of proceeds. The buyer is Auron Energy E&P, an affiliate of Gulf Energy.
A residual $4 million — representing 10 percent of the Tranche B amount — remains outstanding, pending the completion of transition support services, which Tullow expects to finalise before the end of March 2026. A third and final tranche of $40 million will be paid out over five years starting from the third quarter of 2028, with all payments due no later than 30 June 2033. Tullow also retains royalty rights subject to certain conditions, and a no-cost back-in right to a 30 percent participation in potential future development phases of the project.
The disposal marks a significant strategic retreat for Tullow, which once held Kenya up as a flagship asset. The company has been under intense financial pressure in recent years, restructuring its debt and selling non-core assets to stabilise its balance sheet.
Separately, Tullow updated its oil price outlook, noting that its 2026 pre-financing cash flow guidance of $150–180 million was based on an assumed price of $65 per barrel. With prices now surging past $100 a barrel, the company said that if the average price holds at $100 for the remainder of 2026, its pre-financing cash flow would double.
Source: Energy-Pedia