Fri. Nov 15th, 2019

Kenya yet to identify potential crude oil buyers as it eyes 200,000 barrels before export

Cabinet Secretary for Ministry of Petroleum and Mining, Hon. John Munyes addressing delegates during the official opening of 9th East African Petroleum Conference and Exhibition in Mombasa on May 8, 2019

BY MWAKERA MWAJEFA

Kenya is in the process of identifying potential global crude oil buyers before it starts disposing of the stored barrels (bbl) of crude at the Kenya Petroleum Refineries Limited storage tanks.

With daily production of about 600 bbl transported by road from Turkana to Mombasa where over 87,000 bbl have already been stored, the country is targeting 200,000 bbl before export.

Mr John Munyes, the Petroleum and Mining cabinet secretary, while opening the 9th Edition of the East African Petroleum Conference and Exhibition in Mombasa on May 8, said this will strengthen country’s capacity to manage petroleum resources for the benefit of its people.

At the same time, Kenya is in its final stages of enhancing local content policies to address the increment of local participation that encourage foreign investment in the oil and gas sector.

LEGISLATIONS

The existing legislations are the Energy Act 2019, Part IX and Petroleum Act 2019, Part IV.

According to the CS the Petroleum Act that was recently assented provides the country with a comprehensive framework to guide the development of regulations to implement local content.

“The Ministry has been able to develop local content policies that look at upstream, midstream and downstream regulations,” he said adding that the current legislations in development include Local Content Bill 2018, Local Content Oil and Gas Regulations, and Kenya Local Content Policy.

He noted that the Local Content Policy has been developed based on a robust stakeholder engagement and informed by Kenya’s developmental agenda.

This has involved deep consultations with the private sector, public sector (at national and county levels), civil society and development partners.

The framework has taken into consideration the aspirations of Kenya Vision 2030, Kenya Industrialisation Policy, the Big Four Agenda and Kenya Investment Policy.

“This local content policy promotes the national developmental agenda by nurturing local participation towards industrialisation and international competitiveness of Kenyan nationals and firms at community, county and national level,” he added.

EXPLORATION

The CS noted that with oil exploration taking place in Kenya’s four major sedimentary basins – Lamu, Anza, Mandera and Tertiary Rift – the country has been exploring ways to stimulate the development of capacities and encourage Local investments, ownership and participation.

Currently, Kenya oil and gas exploration activities are at 94 wells drilled, 63 exploration blocks gazetted, 27 blocks licensed and 36 blocks open for investors.

“As a developing country and an emerging market, Kenya is rapidly becoming an excellent destination for good business returns,” Mr Munyes said adding that a wide range of investment opportunities exists in the country including the 36 open exploration blocks.

Cited opportunities are the proposed construction of the 820km South Lokichar-Lamu crude oil pipeline and the construction of the 122km 10-inch diameter multiproduct line from Sinendet to Kisumu and completion of Kisumu oil jetty will not only ease petroleum products to Western region but also secure the Lake regional market.

“These developments mean a lot to the oil industry in Kenya,” the CS said adding that this will ensure supply of fuel products, open new businesses, create stability and ease access to such products.

CONFERENCE

Turning to the Conference participants, Mr Munyes said players in the oil and gas sector across East African Community will enhance focus on the industry as well as marketing of the exploration acreage in each of the countries. 

For the right technical skills and building of local expertise, the East African partner states need to support, train and build local expertise for sustaining the sector and maintaining global standards.

Local companies can provide a wide range of services for instance logistics which entails transportation of people and goods, or provision of security for the people and the commodity.

The freight sector can be handy when it comes to exporting the oil and gas. 

“We urge companies working in this space to fill in the gap. It could be through mentorship of companies with potential or providing support to vocational centres so trained plumbers and welders, steel fabricators and much more,” said the State Department for Petroleum principal secretary Andrew Kamau.

This, according to him, will contribute towards ensuring they have the required skills and get local professionals working on these huge national projects.

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