ONGC Videsh and IOC talks to acquire Tullow Oil’s stake in Turkana oil projects

August 3, 2022

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India’s state-run Oil companies, ONGC Videsh and Indian Oil Corp (IOC) have revived talks to acquire stakes Tullow Oil’s stake in Turkana oil projects. The estimated deal of about US $2-$3 billion will set a new record that will offer a foreign government a stake.

India’s state-run Oil companies, ONGC Videsh and Indian Oil Corp (IOC) have revived talks to acquire stakes Tullow Oil’s stake in Turkana oil projects. The estimated deal of about US $2-$3 billion will set a new record that will offer a foreign government a stake. Tullow holds 50% stake in the south Lokichar field while Total of France and Africa Oil corporation holds 25% each.

Tullow has been seeking a strategic investor for Project Oil Kenya to enable it to cushion its risks for the multi-billion-shilling project that includes setting up a crude pipeline and processing facilities for the oilfields. Faced with financial hurdles, Tullow announced its plans to sell a major share of its 50 percent stake in the blocks. If the deal goes through, Indian oil companies will be joint operators of the project.

The ONGC Videsh and IOC team visited Nairobi last week for negotiations. According to reports, the meeting was productive, and the stakeholders have decided to go for a further round of discussions. India, the world’s fourth-biggest oil consumer, which imports about 80 percent of its crude needs, is scouting for oil assets to improve the energy security of the country.

The estimated cost of production from the wells is pegged at $22 a barrel. Going by the current crude price of $100 a barrel, the potential crude in the reservoir would be valued at the US $284 billion. The proven commercially viable reserves are valued at $58.4 billion. A major share of this will go initially to production and shipping costs.