On the Interplay between Stabilization Clauses and Sustainable Development: The Case of Tullow Oil plc in Turkana
Date
2021-03
Authors
Adongo, Stacey
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Journal ISSN
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Publisher
Strathmore University
Abstract
Prior to exploration activities by Tullow Oil plc in Kenya, several Production Sharing Contracts (PSC’s) were signed between the Government of Kenya and the multinational corporation over exploration activities in Turkana County. These PSC’s and terms within them were however not disclosed to the public. One such term is the stabilization clause(s) within these agreements which in essence gives the company assurances that the laws applicable to the contracts are not subject to change at the government’s whim.
Description
In 2012, the Anglo-irish oil and gas exploration company, Tullow Oil plc (Tullow Oil), announced the first discovery of crude oil within Turkana county in Kenya. 1 The company had previously begun its operations in Turkana in 2010 following the signing of a farm out agreement with Africa Oil Corporation, a Canadian-based oil and gas company and Centric Energy-USA. 2 Since 2012, Tullow has drilled more than 21 wells in Lokichar basin, located in Turkana county, that hold an estimated amount of 600 million barrels of recoverable crude oil.