Kenya to draw up natural gas regulations to unlock exploration

Last Updated 13 years ago by Kenya Engineer

By Reuters

Natural gas findings in neighbouring Tanzania and Mozambique are spurring hopes in Kenya and Energy and Petroleum Secretary Davis Chirchir said on Thursday the country needed to speed up efforts to adopt the required legislation.

“We are really behind in terms of timelines. The extractive industry in Kenya today, based on the announcements that have been made, is ahead of legislation, is ahead of the policy frameworks,” Chirchir told reporters.

“So we need to quickly finish the document, confirm from the industry players that they are happy with it, and take it through the legislative process.”

Chirchir did not provide an exact timeframe for when the natural gas regulations and overhaul of existing petroleum laws would be done.

Kenya, where substantial oil discoveries have been made in the northwestern part of the country, last updated its petroleum rules in 1986.Its oil finds are yet to be verified as commercially viable.

Chirchir said some oil companies licensed to prospect for oil and gas in the country’s blocks were reluctant to do so for fear of discovering gas without a suitable legal and fiscal framework to commercialize the gas.

He said that given the increased interest by explorers, the energy ministry plans to offer smaller blocks for exploration and compel companies to speed up their exploration.

Consultants Hunton & Williams and Challenge Energy have recommended the new laws include a clear delineation of roles in the policy making for the upstream, midstream and downstream sections of the sector to avert any overlaps and to reduce inefficiency.

London-listed Tullow Oil and Australia’s Pancontinental Oil & Gas announced in September that their licence consortium’s operator Apache Corp had found gas in the Mbawa-1 shallow well in the Indian Ocean.

Kenya has 46 blocks, of which 44 are licensed to 23 explorers. Seven additional blocks will be delineated soon.

Tullow has raised its estimate for resources in Kenya and announced a new discovery, moving closer to commercial production of oil.

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