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Local benefits and participation at heart of new regulations as Kenya prepares to unlock oil production and exports
Kenya’s Energy and Petroleum Regulatory Authority has been holding nationwide public forums discussing draft regulations to govern the growth of the country’s emerging petroleum sector while protecting local interests
Thirteen years after oil was first discovered in the Turkana region of Kenya, the Energy and Petroleum Regulatory Authority (EPRA) is holding nationwide public meetings to discuss key draft regulations it has developed to support investment and long-awaited commercial exploitation of Kenya’s petroleum resources.
“These regulations are crucial in guiding petroleum exploration and ensuring the country avoids the pitfalls experienced in other oil-rich African nations like Sudan and Nigeria, where resource mismanagement has led to conflict,” said EPRA Director-General Daniel Kiptoo, following public participation forums held in Nairobi on Thursday and Friday. “The government plans to ensure that Kenyans fully benefit from the country’s petroleum resources … We target that, God willing, we should be able to have concluded the regulations by November, latest by December.”
At public forums, stakeholders are being briefed on the objectives, penalties, and permit costs under draft rules which address various upstream petroleum matters including licensing, insurance, land access, cost management, environmental protection, health and safety, local involvement, and equipment handling.
Under the proposed Local Content regulations, foreign oil and gas companies will be required to partner with local Kenyan firms and use Kenyan goods, services, and labour wherever possible. Companies must also train local staff and develop multi-year research and development plans with Kenyan institutions.
The new draft regulations, designed to support investment and exploitation of Kenya’s untapped petroleum resources, and to streamline and strengthen governance in the petroleum sector and benefit Kenyans, include the:
Petroleum (Upstream Petroleum Management and Administration) Regulations;
Petroleum (Upstream Petroleum Operations) Regulations;
Petroleum (Local Content) Regulations;
Petroleum (Upstream Petroleum Cost Management) Regulations;
Petroleum (Upstream and Midstream Environment, Health and Safety) Regulations;
Petroleum (Upstream Petroleum Access to Land) Regulations; and
Petroleum (Midstream Crude Oil and Natural Gas Pipeline and Storage Operations) Regulations.
These regulations will set the stage for the exploitation of the petroleum resources that have been discovered in the South Lokichar Basin in Turkana and other blocks in the country, said Kiptoo last week.
Since 2012 there have been ten discoveries within the South Lokichar Basin, which is estimated to hold about 585 million barrels of oil and has been earmarked for further development. However, no major commercial investment has been made so far, with only a pilot programme run in 2018-2020 to gain experience in exporting oil from remote locations and as a first step towards full development of Kenya’s oil reserves.
“Considering the strides made and to encourage further activities in the upstream oil and gas subsector, the Authority embarked on the development of the regulations aiming to ensure responsible resource management, attract investment, safeguard local communities and protect the environment,” said Kiptoo on Thursday.