The Senate Standing Committee on Energy led by Senator Gideon Moi in conjunction with Strathmore University’s Extractives Industry Centre held a public debate at the institution to enhance understanding of the Local Content Bill. The Bill is geared toward regulating and increasing local content in the emergent oil and gas sector in Kenya. Oil and gas companies will now be required to state how local communities will benefit from the proceeds before they are licensed if a proposed bill becomes law. The public debate was held on 1st September 2016.
Mr. Moi, who chairs the senate energy committee, said “The timing of the discovery of oil, gas and the other mineral resources in Kenya was God-sent. These resources should be used to benefit the locals and that is what this bill is about.” He warned that the minerals could easily change into a curse if not managed properly.
In the view expressed by the Committee, local content is defined as the development of local skills, technology transfer, the use of local man power and manufacturing. It involves building a workforce that is skilled and a competitive supplier base.
Mwambi Mwikamba, the Kenya National Resources Alliance (Kenra) executive director termed the bill as the most progressive yet in ensuring benefits accrued from oil and gas exploration benefit local communities as well. “It is the best law that has been drafted for the extractive sector,” Mwikamba said ahead of the presentation of the Bill before the Senate.
“The bill will also ensure the local oil and gas industry is protected so it can compete fairly with multinationals,” Said Senator Elizabeth Ongoro a member of the Senate Committee. There has been no law spelling out how locals would benefit from the resource which is why Moi’s bill is seen as timely. Local content policies enjoy overwhelming support as evidenced by the proposed Petroleum Exploration, Development and Production (Local Content) Regulation of 2014.
The Bill if enacted is meant to benefit anyone participating commercially in activities related to the exploration, extraction, development and exploitation of oil, gas and other mineral resources in the extractive industry in Kenya. The local content Bill is a commitment to generate capability in oil producing country to support the long-term development of the emerging sector.