National Oil Corporation (NOC) of Kenya is reportedly planning to raise $1bn of debt to acquire a stake in Tullow Oil-operated $3.4bn oil project.

NOC of Kenya CEO Leparan ole Morintat told Bloomberg in an interview that the fundraising for back-in rights in the field will commence once the project partners submit the development plan. Fundraising is expected to take place next year.

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Currently, NOC is negotiating with Saudi Aramco and other undisclosed firms for a non-equity partner for the downstream business, according to the publication.

Morintat further told Bloomberg: “We are looking at signing a public-private partnership deal from a national oil corporation.

“Depending on how much capital outlay they are going to put in we can agree on the duration and terms and the kinds of security they want.”

Although NOC is in talks with other energy firms, it would prioritise state-owned national oil corporations to enable government-to-government deals, Morintat noted.

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However, the firm intends to move ahead with expensive local capital in case it fails to secure a partner. NOC of Kenya plans to use the fundraiser as an equity injection.

The latest move by Kenya’s oil company comes at a time when Tullow and its partners are seeking strategic investors for the oil project.

The project partners, which also include Africa Oil and TotalEnergies, are due to submit a development plan by December 2021.

The project will also include the construction of a pipeline to the coast to allow exports. The field’s gross oil recovery is expected to be around 585 million barrels over its life.