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Tullow overshoots cost recovery claim by over Sh15bn

An audit of the cost recovery bill presented by Tullow has revealed that at least Sh15 billion claimed does not qualify to be repaid by the Kenyan taxpayer.

Tullow Oil, which recently shocked the Petroleum ministry with a Sh204 billion compensation bill, maintained that the amount was reasonable.

The British oil firm said the Petroleum ministry conducted a cost recovery audit for the eight year period between 2010 and 2018.

The final audit report indicated that the disallowable expenditure is $150 million (Sh15.9 billion) of the gross expenditure of $2.04 billion.

“This represents less than eight per cent of the gross expenditure – reasonable by industry standards,” Tullow Oil Kenya Managing Director Martin Mbogo said in a statement.

The cost recovery audit examined all spending by the joint venture and decided what expenditure could be claimed from production revenues. This can only be claimed when production starts.

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