By KENNEDY SENELWA
In Summary
- The prospect of petrodollars had generated high expectations in the arid Turkana area with a push to maximise the benefits from the discovery of 750 million barrels of oil in the South Lokichar basin.
- In a memorandum explaining the refusal to assent to the Petroleum Exploration and Development and Production Bill 2016, President Kenyatta pushed for reduced shares of oil revenues to the county government and the community.
- Governor Nanok is pushing for a 30 per cent share from oil revenues to reverse years of marginalisation of Turkana by successive governments.
A battle over how oil revenue will be shared between Turkana
County in northern Kenya and the national government is shaping up,
after President Uhuru Kenyatta declined to assent to a Bill that spells
out a resource-sharing formula.
The prospect of petrodollars had generated high expectations in
the arid Turkana area with a push to maximise the benefits from the
discovery of 750 million barrels of oil in the South Lokichar basin.
And now, Turkana leaders, led by Governor Josephat Nanok, have
started agitating for increased allocation of the proceeds to the host
community and the county government.
In a memorandum explaining the refusal to assent to the
Petroleum Exploration and Development and Production Bill 2016,
President Kenyatta pushed for reduced shares of oil revenues to the
county government and the community.
The president, in a memorandum to the National Assembly and
Senate, said the revenue due to the local communities should be reduced
from the 10 per cent of what the national government gets as set by
parliament, to 5 per cent.
“This amount should not exceed a quarter of the amount allocated to county government by parliament,” said the memo.
Turkana legislators had pushed for local communities’ share of
oil revenues to be increased from 5 per cent to 10 per cent when the
Bill was debated.
The Turkana MPs pushed for 20 per cent share reducing national government’s portion from 85 per cent to 70 per cent.
President Kenyatta maintained percentage of revenues due to
county governments where oil is found to 20 per cent, but put a caveat
that the money will not be more than twice amount allocated by
parliament in a financial year.
“Unless the shares of the petroleum revenues reserved to county
governments are capped, the implementation of the (percentages set by
Parliament) shall pose the challenge of the inequitable distribution of
resources and the risk that county governments and local communities
shall receive disproportionately higher allocations that might be beyond
their absorption capacities,” the president said in the memo.
Governor Nanok is pushing for a 30 per cent share from oil
revenues to reverse years of marginalisation of Turkana by successive
governments.
“The memorandum violates the rights of Turkana as far as
equitable share of natural resources is concerned. The alleged inability
to manage own resources and affairs is equated to legalising theft of
our resources,” he said during a meeting of community leaders on
December 7, 2016.
“If the president and parliament ignore our plea, the early oil
pilot project will be derailed as we will stop all oil exploration and
exploitation,” he added.
The Turkana County government in early December tried to get
copies of the production sharing contracts that Tullow Oil Plc signed
with Ministry of Energy to no avail.
The memo on the rejection of the Petroleum Bill will now be
scrutinised by the Energy Committee in the National Assembly and its
counterpart in the Senate before consideration by both Houses.
In the National Assembly and Senate, legislators opposed to the memo have to get a two-thirds majority to overturn it.
President Kenyatta sought to strengthen Parliament’s power over
contracts and agreements signed on exploration of oil with sharing of
documents once production starts.
Lawmakers had proposed that the Cabinet Secretary submit to
parliament production sharing contracts for ratification in accordance
with Article 71 of the Constitution.
But President Kenyatta said it would also be important for the
field development plan to be also submitted to Parliament for scrutiny.
He directed that the field development plan and the production
sharing contract be submitted to parliament for ratification within 30
days of approval by both the exploration firms and the Ministry of
Energy.
Parliament would then be required to make its decision within 90
days, without which it would be considered to have been ratified.
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