Tullow replaces Kenyan CEO amid restructuring
Tullow Oil has replaced its country managing director Martin Mbogo and warned of a second round of staff cuts in a raft of consolidations after it posted a loss of Sh140 billion in the six months to June.
The British oil explorer which is also at risk of defaulting on its $640 million debt by April next year said it will scale down Kenya operations because it will be sharing resources with its joint ventures.
“After 10 years of service, Martin Mbogo, currently the Managing Director Tullow Kenya will leave the company at the end of his contract on December 31 2020,” the company said in a statement.
The new London CEO Rhul Dhir who took office in July after the former CEO Paul Macdade was forced to resign saidL
“We sincerely thank Martin for his contributions and achievements for Tullow and the Kenyan Oil & Gas sector in a challenging environment.”
It is still not clear how many Kenyan workers will be laid off, but the layoffs are part of a global consolidation that will affect every country that Tullow operates in.
“Because there will be very limited activity in the field and the group will be sharing resources with its Joint Venture Partners, the team will be considerably smaller although the final headcount is yet to be confirmed”.
Mbogo will be replaced by Tullow Kenya’s Asset Director Madhan Srinivasan.
“I will be working closely with Tullow’s staff and joint venture partners and the Government of Kenya as we take a fresh look at this important project,” Srinivasan said.
“This is a project and a resource of scale that can and will have a major social and economic impact in Kenya when it is developed, and I look forward to building on the work that Martin has done over the past decade,” Mr Srinivasan said.
Tullow is cutting costs to shore up its negative cashflow inorder to honour its debt obligations including the Sh6.5 billion debt that falls due in April 2021.
“The Tullow Kenya team will be reduced over the coming months as the work programme required to deliver the comprehensive review is compiled,” the company announced in a statement at a time when many Kenyans have already been rendered jobless.
In February, Tullow announced that it will let go its employees, where it is believed that at least 35 Kenyans were sent home in a move to survive a spate of bad decisions that brought it where it is.
In its earnings filings last week, the firm warned that “if it was unable to show it had sufficient funds for the 18 months to July 2022 or resolve the forecast liquidity shortfall within 90 days of failing the January test, there will be an event of default by the end of April 2021.
The London-listed firm announced that it is making a series of changes to its organisation in Nairobi and London as part of wider changes to the Tullow Oil group globally and following the recent extension of its licence in Kenya.
It is struggling with low oil prices that had earlier slid to under $30 a barrel before recovering to $40 which is still too low.