Kenya triples oil exploration licensing fees

NAIROBI, Oct. 25 — Kenya will more than triple the license fees for some 46 oil blocks to 1 million U.S. dollars due to the high demand as a result of the discovery of crude oil in Turkana, a senior energy ministry official said Thursday.

Patrick Nyoike, the Permanent Secretary of the Energy Ministry, said the government was currently in the process of modernizing the laws governing the oil exploration, the exploration of coal, renewable energy, geothermal and oil.

Nyoike also said the government would reposes all oil blocks that have not been effectively utilized by the licensed oil exploration firms in the East African nation.

“We have changed the game plans to say the companies that show no serious commitment will get zero term extensions,” Nyoike said on the sidelines of an oil industry conference, here in Nairobi, to discuss the growth of the oil sector.

There are 21 local and international companies licensed to explore oil in the country since the announcement by British firm, Tullow Oil, which said in March that it had discovered substantial oil resources in northern Kenya.

Before the announcement, only 14 firms were licensed to carry out exploration.

Martin Heya, the Energy Ministry’s Commissioner for Petroleum, said there were more firms operating in the country, but only 21 were officially assigned oil blocks.

Kenya is currently grappling with the need to update its laws governing the energy sector amid caution that the discovery of oil may lead to management issues.

“We are saying we need to quickly review laws in a structured manner to enhance the value chain management,” Nyoike said.

Nyoike said the Kenyan government was keen to have clear allocation of the oil revenue to sectors.

Earlier, the government warned the development of the oil infrastructure would depend on actual and commercially viable oil discoveries. “The money from the oil would benefit the communities where it is found,” said Heya.