Africa Oil Corp (TSX:AOI) has announced it is to withdraw from its joint venture agreements and production-sharing contracts in Kenya.
The company said it has submitted withdrawal notices to its joint venture partners on Blocks 10BB, 13T, and 10BA, effectively terminating its involvement in these concessions.
Simultaneously, Africa Oil has also requested the Ministry of Energy and Petroleum's consent to transfer its rights and obligations under the production-sharing contracts to its remaining joint venture partner.
As of December 31, 2022, the carrying value of Africa Oil's intangible exploration assets in Kenya was written down to $58.6 million. The company plans to further impair this value to zero.
Keith Hill, the president and CEO of Africa Oil, explained the rationale behind the decision, stating: "Our strategy has shifted to focus on production and high potential exploration opportunities, including our Orange Basin portfolio, where we are now appraising the exciting Venus discovery, offshore Namibia."
Hill also expressed pride in Africa Oil's role in the discovery of oil fields in Kenya's South Lokichar Basin, believing that these discoveries will contribute to the development of a significant oil-producing region in the future. He expressed gratitude to the government of Kenya, the host communities, and joint venture partners for their support throughout the years.
Africa Oil currently possesses producing and development assets in deepwater Nigeria and an exploration and appraisal portfolio in West and South Africa, as well as Guyana.
Contact the author at jon.hopkins@proactiveinvestors.com