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Tullow Oil has taken a major step in reshaping its business by signing a Sale and Purchase Agreement (SPA) to sell its entire Kenyan portfolio of assets to Gulf Energy.
The deal, worth at least US$120 million, marks a significant milestone for the company and could have lasting effects on Kenya’s oil sector.
What the deal includes
The agreement, announced on 21 July 2025, involves the full transfer of Tullow’s Kenyan oil assets, which represent around 463 million barrels of oil.
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Tullow Kenya BV, a subsidiary of Tullow Oil, holds all these assets and will be fully sold to Auron Energy E&P Limited, an affiliate of Gulf Energy.
The transaction is structured to be completed in three stages:
Tranche A: US$40 million to be paid once the deal is finalised.
Tranche B: US$40 million to be paid when the project receives Final Development Plan (FDP) approval or by 30 June 2026.
Tranche C: US$40 million to be paid by 30 June 2033, depending on oil prices and production levels.
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Tullow Oil
If the average oil price from Q3 2028 is at least US$65 per barrel, Tullow will receive an additional US$2 million every quarter. If the full US$40 million is not paid by 2033, the balance will be paid in one lump sum.
On top of the main payment, Tullow will also get ongoing royalties, receiving a share of 80% of total oil production revenues, depending on oil price and output.
Tullow keeps a foot in the door
Despite exiting the Kenyan market, Tullow has secured a back-in right for 30% participation in future development phases.
This means that if another investor joins the project later, Tullow can choose to come back in and take part—without paying a re-entry cost.
According to Richard Miller, Tullow’s Chief Financial Officer and Interim Chief Executive Officer, the deal supports the company’s wider goals.
We are pleased to announce the signing of the Kenyan SPA, marking another step closer to completion with Gulf Energy. The Transaction supports our aim to strengthen the balance sheet.
Tullow Oil
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Conditions before completion
Before the transaction is fully completed, several steps must be met:
Approval by Kenya’s Competition Authority.
A clear plan to separate Tullow Kenya from the rest of the Tullow Group, both physically and in how it functions.
Full transfer of environmental responsibilities and decommissioning liabilities to Gulf Energy.
Tullow expects to receive the second and third payments once these conditions and relevant approvals are completed.
Why this sale matters for Tullow
Tullow’s decision to sell its Kenyan assets fits into a wider strategy of focusing only on projects that generate steady profits. The company has already sold its interests in Gabon for US$300 million earlier in 2025.
This latest deal helps reduce Tullow’s debts and allows the company to channel its efforts into deeper oil fields in West Africa.
Tullow Oil
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Some of the other benefits Tullow expects from the sale include:
A more focused portfolio of assets.
Stronger cash flow and reduced financial risk.
Continued presence in East Africa through the back-in option.
Better use of technical knowledge to grow reserves elsewhere.
How the money will be used
The funds from the sale up to US$120 million will be used to pay off debts and improve Tullow’s financial stability. According to the company, this will reduce its overall business risk and give it more flexibility moving forward.
The assets being sold include:
Tullow’s full working interest in the Kenyan project.
Associated equipment, permits, and licenses.