Kenya to offer new oil blocks by June 2014

oil kenya-dani simmonds sxc.huThe new law is expected to be sent to the Parliament for approval by June. (Image source: Dani Simmonds/sxc.hu)Kenya has announced that it will offer seven new oil blocks to investors before the end of June this year in the East African country

The licensing bid was stalled by the Energy Ministry as it wants to put in place a new law, which is expected to bring in a legal and fiscal framework to commercialise natural gas discoveries.

The new law is expected to be sent to the Kenyan Parliament for approval by June 2014, the Ministry added.

Joseph Njoroge, energy and petroleum principal secretary, said, “We will offer the new blocks hopefully before the end of the financial year (June) based on the current law. We can’t wait longer.”

Under the new law, policies for upstream, midstream and downstream sections are expected to be clearly defined in order to avoid overlaps and increase efficiency, government sources said. Guidelines on natural gas exploitation are also expected to be provided in the new law, they added.

Also to be enshrined in the new law is the creation of a sovereign wealth fund for petroleum revenue. The law is expected to also specify how it will be managed and disbursed.

The secretary added that out of 46 blocks in Kenya, 41 had already been licensed to 22 international operators.

Inquiries from companies keen on acquiring exploration blocks have increased following discoveries by Tullow Oil and its partner Africa Oil Corporation recently in northwestern Kenya.

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