Indian Oil (IOC) and ONGC Videsh have decided to terminate discussions regarding the acquisition of a stake in Tullow Oil’s Lokichar oil field in Kenya.

This deal, estimated to be worth approximately $2 billion, has been called off after several months of talks, although the specific reasons for the withdrawal have not been disclosed.

Tullow Oil’s CEO, Rahul Dhir, has a connection with India through his previous role as the head of Cairn India.

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During his tenure, Cairn India made a significant onshore oil and gas discovery in Rajasthan’s Barmer district.

Cairn India was later acquired by Vedanta in 2011 and merged with the parent company in 2017.

Indian Oil initially expressed interest in acquiring a stake in the Lokichar project in March 2022.

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However, these initial contacts with Tullow did not progress, potentially due to the scale of the project and the investment required.

Subsequently, Indian Oil brought in ONGC Videsh, which offered expertise in operating oil fields.

Tullow currently holds a 50 percent stake in the Lokichar field and is willing to relinquish operatorship in favor of a strategic partner.

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Total of France and Africa Oil Corporation each hold a 25 percent stake. The oil fields are located in blocks 10BB and 13T, with projected oil production of 120,000 barrels per day (bpd).

The estimated total oil recovery over the field’s lifespan is 585 million barrels.

Similar to Barmer crude, the Lokichar oil is waxy and requires a heated pipeline for transportation to Lamu for shipping. Dhir became Tullow CEO in July 2020, shortly after his Africa-focused company, Delonex, secured $600 million in funding from Warburg Pincus.

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