President Kenyatta is set to give consent on the new petroleum (Exploration, Development and Production) Bill 2015. This is after parliament gave a green light on the law to create an environment for exploration of crude oil and natural gas. The new petroleum Bill was prepared by a technical committee under the Ministry of Energy after reviewing the Petroleum Exploration and Production Act of 1986 that was deemed archaic.

President Kenyatta is set to give consent on the new petroleum (Exploration, Development and Production) Bill 2015. This is after parliament gave a green light on the law to create an environment for exploration of crude oil and natural gas. The new petroleum Bill was prepared by a technical committee under the Ministry of Energy after reviewing the Petroleum Exploration and Production Act of 1986 that was deemed archaic.

According to the new Bill there will be an establishment of the Upstream Petroleum Regulatory Authority (UPRA) and National Upstream Petroleum Advisory Committee (NUPAC). It also proposes awarding of exploration blocks through competitive tendering.

The proposed law in addition requires the Cabinet Secretary to develop a framework for reporting, transparency and accountability in the sector. This requires publication of all agreements, records, annual accounts, reports of revenues, fees, taxes, royalties and other charges, relevant data and information support payments made by a contractor and payments received by the national government, county governments and local communities. After an exploration company has declared a commercial discovery, the Energy CS will approve the field development plan, which has to be submitted to Parliament for ratification.

If the law is passed, the national government will retain 75 per cent of the profit from commercial oil and gas produced, with the county governments hosting the deposits getting 20 per cent and the local community 5 per cent. Later, the county governments will be expected to make laws on the formation of board of trustees and cautious utilization of the funds received, states the Petroleum Exploration and Production Bill, 2015.

Kenya is on its way to constructing its own export oil pipeline from Lokichar to Lamu after Uganda choose Tanzania for its oil pipeline route. This has seen the Energy Ministry plan to bid for tenders for its own pipeline purposed for completion by 2021.  Tullow Oil continues to study data from its freshly concluded appraisal campaign that indicates recoverable resources of up to 750 million barrels of oil in the South Lokichar Basin.

Leave a Reply