Tullow Oil plc has signed a Sale and Purchase Agreement (SPA) with Auron Energy E&P Limited, an affiliate of Kenya’s Gulf Energy Ltd., marking a strategic exit from its Kenyan operations.
The agreement, announced on April 15, 2025, involves the sale of 100% of the shares in Tullow Kenya BV (TKBV), which holds Tullow’s entire working interests in Kenya. The transaction is valued at a minimum of US$120 million, subject to customary adjustments.
“This signing marks a pivotal milestone in the ongoing transaction and brings the sale closer to completion,” said Madhan Srinivasan, Managing Director of Tullow Kenya BV.
Richard Miller, Chief Financial Officer and Interim CEO, commented, “For a total consideration of at least US$120 million, the transaction supports our strategic priority to strengthen the balance sheet, with the first two payments totalling US$80 million expected before the end of the year.”
Consideration Structure
| Consideration | Structure |
| Tranche A | US$40M on completion |
| Tranche B | US$40M on earlier of FDP approval or 30 June 2026 |
| Tranche C | US$40M quarterly from Q3 2028 to 2033 (US$2M per quarter) |
| Royalty Payments | US$0.5 per barrel × 80% of production, subject to conditions |
| Back-in Right | Tullow retains a no-cost option for 30% participation in future development phases |
The transaction includes the transfer of all past and future decommissioning and environmental liabilities to the Purchaser.
Completion is subject to regulatory approvals, including clearance from the Competition Authority of Kenya, and the physical and functional separation of Tullow Kenya from the wider group.
The Disposed Assets comprise approximately 463 million barrels of 2C resources in the South Lokichar Basin. While the assets have no current production or 2P reserves, they represent significant discovered oil potential.
Combined with the recent sale of Tullow’s Gabonese assets, the company expects to generate US$380 million in cash proceeds in 2025, supporting its capital structure optimisation and debt reduction strategy.
