The ink is barely dry on the deal that saw British explorer Tullow Oil exit Kenya, yet the stain of controversy is already spreading across the Turkana basin. For over a decade, the dream of petrodollars has shimmered like a mirage in the northern heat. Now, with the entry of Gulf Energy, that dream is finally moving toward reality—but the price tag for the Kenyan citizen may have just skyrocketed.

On paper, the transaction looks like a victory for local ownership: a Kenyan firm, Gulf Energy, taking the reins of a national asset for $120 million (approx. KES 15.6 billion). But beneath the surface lies a labyrinth of last-minute contract amendments and opaque ownership structures that have opposition leaders and energy analysts sounding the alarm. The central question is no longer just when we will export oil, but who will actually profit from it.

The 85% Question

The heart of the controversy lies in a quiet amendment to the Production Sharing Contract (PSC) made just days before the deal’s final approval. According to documents tabled in the Senate, the "cost recovery" limit—the portion of oil revenue the company can claim to recoup its expenses before sharing profits with the government—was hiked from 55% to a staggering 85%.

To put this in perspective for the mwananchi: for every KES 100 of oil sold, Gulf Energy is now entitled to pocket KES 85 to cover its "costs" before the government even touches the remaining KES 15. Under the previous arrangement, the state’s slice of the pie would have started calculation after only KES 55 was deducted.

"We are looking at a scenario where Kenya provides the resource, the land, and the security, yet we might not see meaningful revenue for the first decade of production," warned Nairobi Senator Edwin Sifuna, who has termed the deal "the biggest scandal" of the current administration. "Kenyans will never see any real benefits from that oil if 85% of it is written off as expenses."

Shadows in the Boardroom

Beyond the math, the mechanics of the takeover have raised eyebrows. Reports indicate that the ownership structure of Gulf Energy—specifically the subsidiary acquiring the assets, Auron Energy E&P—shifted multiple times in the weeks leading up to the final signature. In the world of high-stakes finance, rapid changes in shareholding often signal an attempt to mask the true beneficiaries.

While the Ministry of Energy defends the deal as a necessary step to salvage a stalled project, the lack of transparency is jarring. The government argues that the tax exemptions granted—including waivers on VAT and the Railway Development Levy—were essential to de-risk the project for a local investor facing a $6.1 billion (approx. KES 793 billion) capital commitment to reach first oil by December 2026.

• The Price: Gulf Energy paid $120 million (KES 15.6 billion) for assets Tullow spent billions developing.
• The Shift: Cost recovery cap raised from 55% to 85%.
• The Timeline: First commercial oil now targeted for late 2026.

Turkana’s Wait Continues

On the ground in Lokichar, the nuances of "cost recovery" mean little compared to the reality of jobs and development. The Local Content Bill was designed to ensure that communities hosting such mega-projects benefit first. However, critics allege the new agreement creates loopholes that could exempt the operator from strict local hiring quotas, prioritizing "technical efficiency" over local empowerment.

For a county that has waited 13 years since the first discovery was announced, patience is running thin. The promise of oil was supposed to build schools, roads, and hospitals. If the revenue formula is indeed skewed, Turkana could remain the guardian of a treasure chest to which it holds no key.

As the Senate Committee on Energy begins its probe into the deal this January, the government faces a stark choice: open the books and prove this deal serves the national interest, or risk the oil project becoming a symbol of plunder rather than progress. As one energy analyst noted, "Oil can be a blessing or a curse. The difference is always in the contract."