Kenya puts on ice licensing of oil exploration blocks

A Tullow exploration site in Turkana. The government has frozen the licensing of oil exploration blocks until new laws come into force, officials at the Ministry of Energy have said. PHOTO/FILE  NATION MEDIA GROUP

In Summary

• Parliament is expected to pass the Bill sometime before June despite anticipated lengthy debates concerning it before it paves the way for the Energy Act.
• Some eight new blocks have been created and are there are plans to lease them under a more competitive licensing process through bidding rounds, moving away from the tradition where exploration rights were issued on a first-come, first-served basis.

By Nation Correspondent
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The government has frozen the licensing of oil exploration blocks until new laws come into force, officials at the Ministry of Energy have said.

“We have opted to freeze licensing for oil prospectors until we have put a proper legal framework in place,” said Energy Principal Secretary Joseph Njoroge.

“The new legal framework is being aligned with constitutional requirements. We want to engage all stakeholders,” said the PS in an interview with Nation.

Parliament is expected to pass the Bill sometime before June despite anticipated lengthy debates concerning it before it paves the way for the Energy Act.

Some eight new blocks have been created and are there are plans to lease them under a more competitive licensing process through bidding rounds, moving away from the tradition where exploration rights were issued on a first-come, first-served basis.

Two blocks — 15T and 10BC — were surrendered by British firm Tullow Oil.

Four blocks in Lamu — L4A, L29, L30 and L31, previously owned by US independent firm Anadarko have also been delineated while blocks L25 and L26, also within Lamu which were repossessed from Norwegian state firm Statoil are slated for bidding.

Under petroleum laws known as production sharing contracts (PSCs), exploration firms must cede 25 per cent of their licensed acreage over an agreed time frame.

“We hope to do away with the Energy Act by June 2013,” said the PS.