KOGA poke holes into Energy, Petroleum bills

Critical gaps are being cited in the Energy and Petroleum bills that could potentially put on hold immediate endorsements of the two bills by the Kenyan Parliament.

The Kenya Oil and Gas Association (KOGA) has recommended that tedious exploration permits and consents coupled with unclear penalties for unscrupulous traders in the petroleum business be re-looked if the country is to attract both local and foreign investments and compete effectively in the sector.

There are a whopping 228 permits and consents required legally if an enterprise is to copiously go into oil and petroleum business, with about 30 of those documents needed to fully venture into petroleum trade alone.

KOGA now says the numerous additional licenses asked by different agencies both at the national government and counties are slowing down progress towards the planned exportation of crude oil from fields in Turkana and could hinder the sector’s growth in the long term.

“There are about 30 permits to be obtained by an oil contractor during life of a project, this is besides the 228 permits and consents required in totality to enter the industry. What we are saying is that these need to be streamlined to a reasonable number,” said Mr. Brian Muriuki, the association’s Chairman. He was speaking Wednesday while addressing a parliamentary committee on energy organized by Petroleum Institute of East Africa (PIEA).

The new development comes in the wake of pleas by the new Cabinet Secretary in the Ministry of Petroleum and Mining John Munyes who last week asked for a speedy adoption of Petroleum (Exploration, Development and Production Bill 2017) passed by members of parliament at least by May this year, as Kenya plans to start oil pilot scheme project which will see an estimated 2000 barrels of crude oil from Lokichar, Turkana County, trucked to Mombasa by road for processing.

The Bill, awaiting Parliament’s approval, provides for among other factors, repeal of geothermal resources Act, local content and training in the sector, removal of Value Added Tax (VAT) on LPG appliances and construction of additional oil jetty in the country, as well as define the roles of the petroleum cabinet secretary, national environmental authority (NEMA), Advisory Committee and the Upstream Petroleum Authority in avoidance of conflict in granting licenses and reporting to contractors.

“Expectation are high that the 12^th Parliament will dispense with Petroleum Bill and Energy Bill which will open way for legal and regulatory reforms for the upstream, midstream and downstream segments,” said PIEA’s General Manager, Wanjiku Manyara.