New Bill seeks to create oil and gas sector watchdog
What you need to know:
- The oil and gas industry is presently governed by the Petroleum (Production and Exploration) Act but its provisions have been deemed insufficient.
An independent regulator to manage the oil and gas industry in Kenya could be set up by December.
A new Bill proposes that petroleum production will be managed under Energy Regulatory Authority.
Formation of the watchdog will be culmination of a review of the current Petroleum (Exploration & Production) Act in order to address emerging issues in exploitation of what policy makers say are commercial quantities of oil in Turkana County.
The ongoing review follows concerns by the government that latest developments in the sector have outpaced the existing law, giving oil explorers an upper hand in marketing of Kenya’s natural resources.
It has emerged that investors in the oil and gas industry have to wait for sound rules before committing funds.
Two amendment Bills to the Exploration and Production Act of 1986 and the Energy Act are being drafted and would be presented to Parliament by end of the third quarter this year. A working committee has converged in Mombasa to finalise on the Energy Bill and Upstream Bill as well as the energy policy — the anchor regulation for the industry.
“The new draft Bills are still at the preliminary stage. The final decision rests with the Cabinet Secretary,” said Mr Hudson Andambi, a ministry geologist and member of the technical team.
“We are moving quickly and hope to conclude by the third quarter,” he said.
“The idea is to draft two Bills and not the omnibus Energy Bill as initially planned. This is in an effort to incorporate stakeholders’ views,” said Frederick Nyang’, acting director-general at the Energy Regulatory Commission.
The oil and gas industry is presently governed by the Petroleum (Production and Exploration) Act but its provisions have been deemed insufficient.
At the moment, the National Oil Corporation of Kenya is the legal investment arm in the oil and gas business on behalf of the government, while the National Fossil Fuels Advisory Committee advises the government on contracts with investors while the licensing role lies with the Energy minister.
The current Energy Act 2006 over concentrated on electricity necessitating the review.
The law review team has modelled on the experiences of Indonesia, Brazil, Norway, US, India, Malaysia, India, Australia Philippines and South Korea.
