Tullow Oil lifts ban on its main licences in Kenya

British oil company Tullow Oil has recently announced the lifting of its declaration of force majeure on its main licences in Kenya. This decision paves the way for the resumption of activities at its Turkana oil sites, a move influenced by the easing of COVID-19 restrictions in the region. The company's declaration of force majeure had raised concerns of potential delays in a final investment decision expected this year on the Turkana fields. In a recent interview with CNBC Africa, Ken Gichinga, the Chief Economist at Mentoria Economics, discussed the implications of this development and its potential impact on the oil sector in Kenya. Gichinga highlighted the importance of the revenue-sharing formula in the region, particularly between national governments, county governments, and local communities. He noted that past issues surrounding revenue sharing had negatively affected the industry, citing the challenges faced during the 2017 general election. It took considerable time for a framework to be established for revenue allocation, indicating that this remains a significant concern moving forward. The decision by Tullow Oil to lift the ban on its main licences is a positive development for the oil sector in Kenya. It signifies a step towards the resumption of key activities in the Turkana oil fields, which have the potential to drive economic growth and development in the region. Additionally, the easing of COVID-19 restrictions further facilitates the company's operations, enabling it to progress towards a final investment decision. Moreover, Gichinga highlighted the importance of effective communication and collaboration between various stakeholders in the oil industry. He emphasized the need for a transparent and mutually beneficial approach to revenue sharing, ensuring that all parties involved are adequately represented in the decision-making process. As the oil sector in Kenya continues to navigate challenges and opportunities, the lifting of the ban on Tullow Oil's main licences represents a significant milestone. It underscores the company's commitment to advancing its operations in the region and underscores the potential for growth and investment in Kenya's oil industry.