Firm not free yet after Kenya project exit

Africa Oil Corp still has liabilities amounting to US$1,8 million for its operations in Kenya and another claim of an unspecified amount from the local community, a year after it exited the three oil blocks in Turkana oilfield.

Africa Oil, a Canadian oil and gas company, in a report to its shareholders for the first quarter of this year, put its “accounts payable and accrued liabilities” at US$11,8 million down from US$14,2 million in December last year relating to its exit from Blocks 10BB, 13T and 10 BA on June 30.

“Accounts payable and accrued liabilities mainly relate to liabilities, exit and office close-down costs associated with the withdrawal from Kenya,” said Africa Oil in its report to shareholders for March 2024.

Its liability is likely to increase as the company discloses it has since been informed of another claim of an unspecified amount from the local community.

After the exit of its subsidiary, Africa Oil Kenya BV, the parent company revealed in its half-year results for 2023 that it had settled US$15,5 million between April and June in 2023 to the Kenya Revenue Authority and other undisclosed partners. The firm says it is still awaiting the government’s approval to transfer its interests and future obligations in the three oil blocks to British oil explorer Tullow Oil.

Until May 2023, the three blocks were owned jointly by Tullow Oil, which had a 50 percent stake, TotalEnergies (25 percent) and Africa Oil (25 percent). However, Africa Oil and TotalEnergies left the joint venture “unequivocally and unconditionally” raising doubts on the viability of a project the country had once staked its hopes of altering its economic fortunes by joining the oil-producing club.

On May 23, 2023, Africa Oil announced its withdrawal from the entirety of the production sharing contracts and joint operating agreements for Blocks 10BB, 13T, and 10BA, and wrote to the Energy ministry asking it to transfer all its rights and future obligations to the remaining joint venture partner, Tullow Oil. — The East African