Tullow Oil, the British firm exploring oil in Turkana, is in deep trouble abroad, which may put Kenya’s oil wealth dreams in jeopardy.
The company’s troubles come after its decision to downgrade its production outlook, and the exits of the company’s chief executive and exploration director.
The problems affecting the firm are expected to affect its operations worldwide.
The share price of the London listed firm went on a free fall, cutting its market value by over Sh130 billion after its shares crashed by 72 per cent to 70 pounds, a 16-year low.
On Tuesday, Tullow revealed it was open to receiving offers to be bought “at the proper value”. It also scrapped its dividend, making a bad situation worse, in what will make it harder to raise the billions it needs to continue with exploration.
It has been a bad year for Tullow that started with technical difficulties in Ghana, its projects in Uganda and Kenya have faced delays and results from its wells in Guyana have been below expectations.
However, it is a weak performance by its flagship assets in Ghana that appears to have turned its fortunes upside down.
The firm’s new executive chairperson, Ms Dorothy Thompson, said the ousted officials, chief executive Paul McDade and the exploration director Angus McCoss had made great strides by delivering two major offshore developments in Ghana and significant discoveries in Kenya and Uganda.
“The board has, however, been disappointed by the performance of Tullow’s business and now needs time to complete its thorough review of operations,” she said.
The firm has also slashed its capital expenditure and cut costs at its operating fields, decisions that are likely to affect Kenya, where it is still having problems with locking down a final investment decision.
“In light of these new production forecasts, there will be a thorough reassessment of the Group’s cost base and future investment plans in order to allocate appropriate capital to the Group’s core production assets, development projects and continued exploration,” it noted.
Given that Kenya is not one of its most important oilfields, any cuts in exploration activities are likely to be felt here in Nairobi and in the Turkana oilfields.
However, Kenya has downplayed Tullow Oil’s problems abroad, saying, they are a “non-issue” here with Petroleum Principal Secretary Andrew Kamau saying the country has nothing to worry about.
“We’re not in Ghana and this is a non-issue. Do your own research and do not just take my word for it. What happens in Ghana may not affect us,” Mr Kamau said.
Kenya completed its first shipment of the controversial early oil pilot scheme with 200,000 barrels of crude oil sold to a Chinese company for Sh1.2 billion.
Tullow says it has invested more than Sh300 billion in Kenya and hopes to make the first commercial sale in 2022.
The firm has prepared over 400,000 square kilometres of oilfields. However, it is drilling on only 10,000 square kilometre at the moment.
Given the fact that exploration is a capital-intensive exercise, investors need to be assured that there are future prospects in a company before they pump in money.
As it is, Tullow will find it hard when it goes out to look for money to fund the expensive venture.
But of most urgent attention for the Kenya project is building of the 890-kilometre pipeline from Lokichar to Lamu, which is critical in making Kenya’s oil viable.
The firm will now be temporarily run by Ms Thompson, while Mark MacFarlane, who was East Africa Executive Vice-President is now chief operating officer.
Tullow said it would provide a full financial and operational updates on February 12 when it releases its full year results, with an update on progress to be given in the Group’s Trading Statement on January 15.
In 2020, the Group’s production is forecast to average between 70,000 and 80,000 barrels of oil per day (bopd), down from the 87,000 bopd.
Production for the following three years is expected to average around 70,000 bopd.
Various factors had been identified that caused reduction in production guidance.
“On the Jubilee field, these factors include significantly reduced offtake of gas by the Ghana National Gas Company, which Tullow makes available at no cost and lower facility uptime,” it said.
Other factors cited include mechanical issues and there is faster-than-anticipated decline in one of its oilfields.
Public officers above 58 years and with pre-existing conditions told to work from home: The Standard
Head of Public Service Joseph Kinyua. [File, Standard]
In a document from Head of Public Service, Joseph Kinyua new measure have been outlined to curb the bulging spread of covid-19. Public officers with underlying health conditions and those who are over 58 years -a group that experts have classified as most vulnerable to the virus will be required to execute their duties from home.
However, the new rule excluded personnel in the security sector and other critical and essential services.
“All State and public officers with pre-existing medical conditions and/or aged 58 years and above serving in CSG5 (job group ‘S’) and below or their equivalents should forthwith work from home,” read the document,” read the document.
To ensure that those working from home deliver, the Public Service directs that there be clear assignments and targets tasked for the period designated and a clear reporting line to monitor and review work done.
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Others measures outlined in the document include the provision of personal protective equipment to staff, provision of sanitizers and access to washing facilities fitted with soap and water, temperature checks for all staff and clients entering public offices regular fumigation of office premises and vehicles and minimizing of visitors except by prior appointments.
Officers who contract the virus and come back to work after quarantine or isolation period will be required to follow specific directives such as obtaining clearance from the isolation facility certified by the designated persons indicating that the public officer is free and safe from Covid-19. The officer will also be required to stay away from duty station for a period of seven days after the date of medical certification.
“The period a public officer spends in quarantine or isolation due to Covid-19, shall be treated as sick leave and shall be subject to the Provisions of the Human Resource Policy and procedures Manual for the Public Service(May,2016),” read the document.
The service has also made discrimination and stigmatization an offence and has guaranteed those affected with the virus to receive adequate access to mental health and psychosocial supported offered by the government.
The new directives targeting the Public Services come at a time when Kenyans have increasingly shown lack of strict observance of the issued guidelines even as the number of positive Covid-19 cases skyrocket to 13,771 and leaving 238 dead as of today.
SEE ALSO: Working from home could be blessing in disguise for persons with disabilities
Principal Secretaries/ Accounting Officers will be personally responsible for effective enforcement and compliance of the current guidelines and any future directives issued to mitigate the spread of Covid-19.
Uhuru convenes summit to review rising Covid-19 cases: The Standard
President Uhuru Kenyatta (pictured) will on Friday, July 24, meet governors following the ballooning Covid-19 infections in recent days.
The session will among other things review the efficacy of the containment measures in place and review the impact of the phased easing of the restrictions, State House said in a statement.
This story is being updated.
SEE ALSO: Sakaja resigns from Covid-19 Senate committee, in court tomorrow
Drastic life changes affecting mental health
Kenya has been ranked 6th among African countries with the highest cases of depression, this has triggered anxiety by the World Health Organization (WHO), with 1.9 million people suffering from a form of mental conditions such as depression, substance abuse.
Globally, one in four people is affected by mental or neurological disorders at some point in their lives, this is according to the WHO.
Currently, around 450 million people suffer from such conditions, placing mental disorders among the leading causes of ill-health and disability worldwide.
The pandemic has also been known to cause significant distress, mostly affecting the state of one’s mental well-being.
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With the spread of the COVID-19 pandemic attributed to the novel Coronavirus disease, millions have been affected globally with over 14 million infections and half a million deaths as to date. This has brought about uncertainty coupled with difficult situations, including job loss and the risk of contracting the deadly virus.
In Kenya the first Coronavirus case was reported in Nairobi by the Ministry of Health on the 12th March 2020. It was not until the government put in place precautionary measures including a curfew and lockdown (the latter having being lifted) due to an increase in the number of infections that people began feeling its effect both economically and socially.
A study by Dr. Habil Otanga, a Lecturer at the University of Nairobi, Department of Psychology says that such measures can in turn lead to surge in mental related illnesses including depression, feelings of confusion, anger and fear, and even substance abuse. It also brings with it a sense of boredom, loneliness, anger, isolation and frustration. In the post-quarantine/isolation period, loss of employment due to the depressed economy and the stigma around the disease are also likely to lead to mental health problems.
The Kenya National Bureau of Statistics (KNBS) states that at least 300,000 Kenyans have lost their jobs due to the Coronavirus pandemic between the period of January and March this year.
KNBC noted that the number of employed Kenyans plunged to 17.8 million as of March from 18.1 million people as compared to last year in December. The Report states that the unemployment rate in Kenya stands at 13.7 per cent as of March this year while it stood 12.4 per cent in December 2019.
Mama T (not her real name) is among millions of Kenyans who have been affected by containment measures put in place to curb the spread of the virus, either by losing their source of income or having to work under tough guidelines put in place by the MOH.
As young mother and an event organizer, she has found it hard to explain to her children why they cannot go to school or socialize freely with their peers as before.
“Sometimes it gets difficult as they do not understand what is happening due to their age, this at times becomes hard on me as they often think I am punishing them,”
Her contract was put on hold as no event or public gatherings can take place due to the pandemic. This has brought other challenges along with it, as she has to find means of fending for her family expenditures that including rent and food.
“I often wake up in the middle of the night with worries about my next move as the pandemic does not exhibit any signs of easing up,” she says. She adds that she has been forced to sort for manual jobs to keep her family afloat.
Ms. Mary Wahome, a Counseling Psychologist and Programs Director at ‘The Reason to Hope,’ in Karen, Nairobi says that such kind of drastic life changes have an adverse effect on one’s mental status including their family members and if not addressed early can lead to depression among other issues.
“We have had cases of people indulging in substance abuse to deal with the uncertainty and stress brought about by the pandemic, this in turn leads to dependence and also domestic abuse,”
Sam Njoroge , a waiter at a local hotel in Kiambu, has found himself indulging in substance abuse due to challenges he is facing after the hotel he was working in was closed down as it has not yet met the standards required by the MOH to open.
“My day starts at 6am where I go to a local pub, here I can get a drink for as little as Sh30, It makes me suppress the frustration I feel.” he says.
Sam is among the many who have found themselves in the same predicament and resulted to substance abuse finding ways to beat strict measures put in place by the government on the sale of alcohol so as to cope.
Mary says, situations like Sam’s are dangerous and if not addressed early can lead to serious complications, including addiction and dependency, violent behavior and also early death due to health complications.
She has, however, lauded the government for encouraging mental wellness and also launching the Psychological First Aid (PFA) guide in the wake of the virus putting emphasis on the three action principal of look, listen and link. “When we follow this it will be easy to identify an individual in distress and also offer assistance”.
Mary has urged anyone feeling the weight of the virus taking a toll on them not to hesitate but look for someone to talk to.
“You should not only seek help from a specialist but also talk to a friend, let them know what you are undergoing and how you feel, this will help ease their emotional stress and also find ways of dealing with the situation they are facing,” She added
Mary continued to stress on the need to perform frequent body exercises as a form of stress relief, reading and also taking advantage of this unfortunate COVID-19 period to engage in hobbies and talent development.
“Let people take this as an opportunity to kip fit, get in touch with one’s inner self and also engage in reading that would help expand their knowledge.