Tullow Oil Plc (TLW) said it temporarily suspended drilling at two exploration blocks where oil has been discovered in northwestern Kenya’s Turkana region because of protests over local employment practices.
Work was halted to “prevent further escalation of the demonstrations while discussions to resolve the issue for the long term are ongoing,” the company said today in a regulatory filing. A number of demonstrations began Oct. 26, Tullow said in a separate statement e-mailed by public relations firm Africa Practice. The suspension affects blocks 10BB and 13T, which Tullow operates and jointly owns with Africa Oil Corp. (AOI)
“Tullow is working closely with the local communities, the local government and the national government so that the company can resume work in Blocks 10BB and 13T as soon as possible,” according to the statement.
Turkana, an arid area home to mainly cattle herders and farmers, is the poorest of Kenya’s 47 counties, with about 95 percent of the region’s 855,399 people living in poverty, according to government data. About 800 of Tullow’s 1,400 workers in the region are from the local community, it said.
Kenya’s first crude was found last year and initial production may begin as early as 2014. Tullow said in September that it planned accelerating its drilling program by sinking a dozen more exploration wells in Kenya over the next 12 months.
Tullow, based in the U.K., declined 1.6 percent to 962.50 pence by 12:08 p.m. in London.
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