Oil exploration law under review

June 6, 2013
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The ministry's Petroleum Energy Commissioner Martin Heya says the current law is outdated and does not effectively address industry as a whole especially the gas exploration sector/FILE
The ministry’s Petroleum Energy Commissioner Martin Heya says the current law is outdated and does not effectively address industry as a whole especially the gas exploration sector/FILE
NAIROBI, Kenya, Jun 6 – The Ministry of Energy and Petroleum has embarked on conducting a comprehensive review of the current Petroleum Exploration Act.

The ministry’s Petroleum Energy Commissioner Martin Heya says the current law is outdated and does not effectively address industry as a whole especially the gas exploration sector.

Speaking at an oil and gas transaction conference in Nairobi on Thursday, Heya said the ministry has already approached the World Bank to assist in reviewing the Act especially in the development of the fiscal and contractual terms for natural gas.

He said that the World Bank has secured consultants who are conducting the review in close consultation with the ministry and other stakeholders in the oil and gas industry.

“The World Bank in collaboration with the ministry have already held two successful workshops where the stakeholders had an ample opportunity to interrogate the draft review documents to ensure that the country takes informed ownership of the final documents that should meet the stipulated threshold of the national interest,” he said.

A final workshop, inclusive of major stakeholders in the industry will be held in July after the World Bank complete the review process.

“We want to conduct an all participatory process to ensure that peace and harmony are guaranteed for the success of the exploration programmes to discover commercially viable hydrocarbon for equitable share of the benefits that will accrue,” he said.

The ministry is looking into establishing a functional petroleum department so as to avoid challenges facing other countries in the continent due to unpreparedness and lack of advanced planning.

“The department will be responsible for working out modalities for development of policies that will be bench-marked on the best industry practices and to come up with a plan on effective management of petroleum resources in this country,” he revealed.

They have also prepared a term sheet for minimum terms that will be given to interested oil companies to compete on the available open blocks.

Currently the country currently has 46 blocks of oil 44 of which are licensed to 23 international companies.

Heya revealed that the ministry has created an additional seven blocks which raise the total number of blocks to 53. The blocks are in the process of being gazette during this month.

“About seven exploration wells are set to be drilled by the end of 2013 both onshore and offshore in the country’s four sedimentary basins of Lamu, Mandera, Anza and Tertiary Rift,” he said.

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