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Tullow in Talks to Exit Namibia’s Kudu Gas in Investment Shift

Tullow Oil Plc (TLW), a U.K. exploration company, is in talks with Namibia’s government to withdraw from the $2 billion Kudu gas project as it shifts investments to other parts of Africa.

Tullow, which has a number of large oil developments in western and eastern Africa, needs to allocate capital to those, the London-based company said today in an e-mail. Tullow has a 31 percent stake in the Kudu project.

“It is clear that these developments rank higher than Kudu,” it said. “However, Kudu remains an excellent project for Namibia and we are committed to assisting the government in moving it forward.”

The Kudu field holds about 1 trillion cubic feet of gas and is located 200 kilometers (124 miles) off the southern town of Oranjemund. Gas from the field would be used in a power station to generate electricity in 2018.

Itochu Corp., which also has a stake in Kudu, may also pull out, prompting Namibia to approach China Africa Development Fund and China National Offshore Oil Corp., Namibia Press Agency reported today, citing Mines and Energy Minister Isak Katali.

Tullow has interests in the giant Jubilee field in Ghana. It plans to invest about $1 billion to explore for oil in Mauritania, Kenya, Ethiopia and Norway and drill its first well off Guinea.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.netIndranil Ghosh, Tony Barrett

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