Africa Oil, a Canadian firm paid Ksh2.17 billion to settle a tax dispute with the Kenya Revenue Authority before folding its operations in Kenya.
According to a Business Daily report, Africa Oil paid the amount between April and June this year after it ended its interest in the Turkana Oil fields.
The parent company disclosed the payment to KRA and other partners in their half-year report covering the period that it operated in the country as one of the three firms spearheading Kenya’s oil search.
“In quarter two 2023, the company completed its negotiations on the penalties and interest relating to the historical tax dispute and settled historical partner and other disputes resulting in payments of Sh2.17 billion ($15.5 million),” Africa Oil stated in financial disclosures for the period ended June.
Africa Oil Kenya BV exited the Turkana Oil project in May after relinquishing its 25 per cent shareholding to Tullow Oil. In a statement, the Canadian oil and gas company indicated that it was fully withdrawing from the joint upstream development project.
Following the withdrawal notice, Africa Corp indicated it was cutting investment in the project, which stood at Ksh8 billion as of December 31, 2022.
“The carrying value of the Kenya intangible exploration assets was written down to Ksh 8 billion ($58.6 million) at December 31, 2022, and the Company intends to further impair this value to zero,” the statement read in part.
Africa Oil Corp Chief Executive Officer Keith Hill revealed that the company was shifting its operations to Namibia.
Total also ceded its 25 per cent, leaving ownership of the South Lokichar oil wells to Tullow Oil.
