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The National oil corporation of Kenya will exercise its right to back in 2 blocks in North Western Kenya that have already yielded successful results namely Block 10BB and block 13T operated by Tullow Oil and its partner Africa Oil.<\/p>\n
This will be the first time that the industry regulator which doubles as the Kenyan government explorer will back in on any block as the government hopes to play a part in the production of oil and gas that is currently estimated to be over 600mbbl.<\/p>\n
This is part of the contract under the production sharing agreement that allows the government to participate should any discovery be made by acquiring some equity on the block in question despite not having invested in exploration.<\/p>\n
According to National Oil Corporation managing director Summaya Athmani in an interview with OilNews Kenya the company is yet to discuss internally to agree on what percentage stake it will acquire.<\/p>\n
\u201cUnder the PSC we have a clause that allows the government to acquire a stake in blocks inside the country should a discovery be made. National Oil on behalf of the government will therefore exercise this right although we are yet to decide on the equity to acquire,\u201d says Athmani.<\/p>\n
\u201cGovernment has elected in that development area. If the Government exercises its option to participate, the contractor (or each entity constituting the contractor pro-rata) shall transfer to the Government that percentage interest specified by the Government. The Government’s participation shall be effective from the date the development plan hereof is adopted,\u2019 reads part of the current Kenyan PSC.<\/p>\n
Once the government participation has kicked in shall own and separately take and dispose of its share in the petroleum produced and saved to which the contractor is entitled under this contract in respect to all decisions taken under the participation agreement.<\/p>\n
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