Kenya’s National Assembly Adopts The Petroleum (Exploration, Development and Production) Bill

The Kenyan national assembly has adopted the much awaited Petroleum (Exploration, Development and Production) Bill (National Assembly Bill No. 44 of 2015) paving way for the country to move closer to production. Following the adoption the bill moves to the senate after which any recommendations will be included before it is dorwarded to the president for assent.

Among beneficiaries of the Petroleum Bill include the local communities which will now receive 10 percent of profits from oil production as well as counties who will further receive 20 percent. A proposal to have the owner of the land receive 1 percent on top of the legal land compensation was shot down

The Bill presented by the Leader of Majority in the National Assembly, Aden Duale seeks to legalize the various upstream petroleum operations and awards various privileges to the cabinet secretary of the concerned ministry in regards to bidding and block awarding.

In this regard the National Assembly has given the Cabinet Secretary Energy and Petroleum powers to execute a petroleum contract even where there are no bids although after  a public announcement on two local dailies.

Among punitive measures included by the National Assembly to protect the oil sector anyone who engages in petroleum upstream trading without a license will face a five year jail term or risk a fine of not less than 10 million shillings.

On overlooking the upstream sector the petroleum bill establishes an upstream regulatory authority ran by a board whose members will be appointed by the cabinet secretary with the mandate to monitor, regulate and advise the cabinet secretary on petroleum issues.

“(a) regulate, monitor and supervise upstream petroleum operations in Kenya in accordance with this Act, the regulations made thereunder and the relevant petroleum agreement.”

OilNews Kenya will analyze the Bill fully once an official copy with all amendments is available.

NB: Please note a number of corrections have been made on the original article since the first publishing.