Workers walk past storage tanks at Tullow Oil's Ngamia 8 drilling site in Lokichar. Image Courtesy: [Reuters]

Tullow Oil PLC has posted a net loss of USD 1.69 Billion for the full year ended 31 December 2019.

For such a promising corporation, it posted revenues of just USD 1.68 Billion during the same period. The company has now moved to suspend dividends payments, at the same time lowering its capital expenditure to USD 350 million.

Tullow Oil is blaming the dismal performance on exploration write-offs and impairments totaling to USD 2 Billion.

In addition to slashing its workforce by 35% last year, Tullow Oil announced that it would send its CEO and Exploration Director packing for what it termed as disappointing performance.

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“This has been an intense period for Tullow as we have worked hard on a thorough review of the business which has led to clear conclusions and decisive actions. We are focused on delivering reliable production, lowering our cost base and managing our portfolio to reduce our debt and strengthen our balance sheet” Says Dorothy Thompson, Tullow Oil’s Executive Chair.

“Even with recent events in oil markets, Tullow’s assets remain robust: we are a low-cost African oil producer, with a strong hedging position, substantial reserves that underpin our business and a high potential exploration portfolio.” She added.

In February, CEO Martin Mbogo admitted to Sunday Nation that Tullow oil was essentially broke. The British Oil explorer is now looking at selling part of its stake in the Turkana project as a means to cover incurred costs.

On Wednesday, Tullow oil shocked the Kenyan Government when it demanded Ksh 204 Billion as compensation for the six years it has been operating in the Turkana and Lokichar Oil Fields.

The Ministry of Petroleum, however, quickly shot down the compensation bill arguing that it was overly inflated and largely unjustified.

A top official from the ministry told Business Daily that the ministry had written back to Tullow Oil demanding and explanation for the hefty bill.

Going forward, Tullow says that it remains fully committed to the Kenya Early Oil project, and the board has approved the requisite 2020 budget targeting a Final Investment Decision (FID) at the end of 2020.

But the Early Oil Pilot Scheme that was flagged off by President Uhuru in August last year – will remain suspended; thanks to severely damaged roads in Lokichar and harsh weather conditions.

Click here to download the full report – Tullow Oil PLC full-year results 2019

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