There’s no rush to auc­tion new oil blocks – state

Petroleum PS says the gov­ern­ment is not in char­ity busi­ness and wants to get more data. The com­pa­nies that ac­quire the blocks should pay some fees

The Star (Kenya) - - News Business - CON­STANT MUNDA @munda­con­stant

The Min­istry of En­ergy and Petroleum says it will not rush the auc­tion of the 17 new oil ex­plo­ration blocks it cre­ated re­cently de­spite ris­ing in­ter­est from in­vestors.

Petroleum Prin­ci­pal Sec­re­tary An­drew Ka­mau says the blocks will in fu­ture be sold at the right price and to the right in­vestor.

“Un­for­tu­nately, what we are see­ing in a low-priced en­vi­ron­ment is peo­ple come, they get blocks for their own rea­sons and we don’t get the data that we want,” Ka­mau said. “We are not in any rush to give out any blocks be­cause it does not meet our strate­gic in­tent as a coun­try at the mo­ment.”

In­ter­est in Kenya’s oil block has been on the rise since Fe­bru­ary 2012 when Bri­tish ex­plorer Tul­low Oil and its then equal part­ner African Oil of Canada struck oil in block 10BB in Lo­kichar Basin, south of Turkana county.

Africa Oil has since farmed out half of its stake in oil-rich blocks 10B and 13T to Dan­ish busi­ness con­glom­er­ate Maersk. The Lo­kichar Basin has re­cov­er­able re­serves in the up­wards of 750 mil­lion bar­rels.

“It is not a must that we give out blocks, we don’t have to. The rea­son is be­cause we would like to get more and more data,” Ka­mau said. “We would also like com­pa­nies that get these blocks to do some work, pay some fees ... and give us some data.”

The cost of the blocks depends on the level of ex­plo­ration, in­clud­ing the data avail­able and wells sunk.

The cre­ation of new blocks brings the coun­try’s tally to 63 blocks for ex­plo­ration.

Civil so­ci­ety groups – Ox­fam Kenya and Kenya Civil So­ci­ety Plat­form on Oil and Gas – in April called for an au­dit of 27 multi­na­tion­als with stakes in Kenya’s 41 petroleum blocks.

They said about 20 of the firms own the blocks through sub­sidiaries in tax-haven or low-tax ju­ris­dic­tions.

“What hap­pens is that the sub­sidiaries in the tax havens are used as ve­hi­cles to trans­fer costs to Kenya,” KCSPOG co­or­di­na­tor Charles Wan­guhu said at a brief­ing on April 1.


Petroleum Prin­ci­pal Sec­re­tary An­drew Ka­mau at the Tul­low Oil brief­ing in Nairobi last Fri­day

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