{"id":1639,"date":"2014-08-19T00:10:54","date_gmt":"2014-08-18T21:10:54","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=1639"},"modified":"2015-09-07T14:37:05","modified_gmt":"2015-09-07T14:37:05","slug":"experts-warn-on-proposed-windfall-tax-in-attracting-investors-to-kenya","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/experts-warn-on-proposed-windfall-tax-in-attracting-investors-to-kenya\/","title":{"rendered":"Experts warn on proposed windfall tax in attracting investors to Kenya"},"content":{"rendered":"

Experts are warning that a proposed windfall tax by the Kenyan government on oil once production starts could keep away potential investors much as it would amount to more income for the state.<\/p>\n

According to Dr. Anthony Hyatt a lecturer at the Aberdeen based Robert Gordon University the concept that involves increased taxation should oil prices exceed a set value, have long term effects on the industry and is considered as a fiscal risk that could slow down activity.<\/p>\n

\u201cWindfall taxes brought in by the UK government have led to a slowdown in investment. The UK Is now considered among countries with a record of changing tax regimes especially given that the windfall tax was introduced after oilfields had started producing,\u201d says Hyatt.<\/p>\n

The lecturer proposes that the government in the various production sharing agreements needs to structure deals that would remain a win-win situation for both parties especially considering that exploration is only in the early stages with the majority of the country still untested.<\/p>\n

Hyatts view is however set to be unpopular among community groups and political leaders who are determined to reap the most out of the reserves should they be termed of commercial quantities and thus a greenlight to production\u00a0 be given.<\/p>\n

\u201cMany people view the oil industry as being money stuffed. No one remembers the risks involved with companies having to sink in millions if not billions of dollars in investments that are never guaranteed not to mention totally capital intensive to put up facilities should oil be discovered in large quantities.\u201d<\/p>\n

The don is also pessimistic that oil companies that invest millions in corporate social responsibility will put much in local content in regions where their profits are squeezed to the last drop.<\/p>\n

\u201cStudies have shown oil is less profitable than selling soda, retail, manufacturing among others but everyone targets this industry and ignore the rest,\u201d he adds.<\/p>\n

Elsewhere in the world plans by governments to levy more taxes on oil companies have always been met with opposition due to the risk of decrease in jobs and increase in products.<\/p>\n

“With less money available, companies potentially could reduce investments in domestic energy production and slash research spending,” warned\u00a0Jim Constantopoulos a professor of geology at Eastern New Mexico University\u00a0\u00a0cnjonline.com<\/a>\u00a0following a plan by the U.S government to increase taxes on the oil and gas industry in 2013.<\/p>\n

Kenya\u2019s president Uhuru Kenyatta last week stated his government\u2019s intention to impose capital-gains and windfall taxes on oil, gas and mining companies within months to ensure the East African nation maximises benefits from its mineral resources.<\/p>\n

“We want something that’s fair, but equally recognising that Kenya as a country must benefit from this.” Said Kenyatta.<\/p>\n

Hyatt who offers corporate lectures is currently offering training Kenya\u2019s MPs and Senators sitting in various energy related committees in parliament on the industry as efforts to formulate legislation and other policy documents continue.<\/p>\n

Tullow Oil and Africa Oil have discovered oil reserves in Block 13 T and Block 10 BB in northern Kenya’s South Lokichar Basin, estimated at a combined 600 million barrels.<\/p>\n","protected":false},"excerpt":{"rendered":"

Experts are warning that a proposed windfall tax by the Kenyan government on oil once production starts could keep away potential investors much as it would amount to more income … Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":630,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[11],"tags":[44,70,627,671,955,1444,1574,1827,2177,2571,2573,2580,2615,2617,2738],"class_list":["post-1639","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-top-news","tag-aberdeen","tag-africa-oil","tag-dr-anthony-hyatt","tag-east-africa","tag-gas","tag-lokichar","tag-mining","tag-oil","tag-robert-gordon-university","tag-tullow-oil","tag-tullow-oil-plc","tag-turkana","tag-uhuru-kenyatta","tag-uk-government","tag-windfall-tax","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/03\/oil-money.jpg?fit=300%2C400&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-qr","jetpack-related-posts":[{"id":1980,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kenya-could-beat-mozambique-tanzania-for-upstream-investment-in-east-africa-globaldata-analyst\/","url_meta":{"origin":1639,"position":0},"title":"Kenya could beat Mozambique, Tanzania for Upstream Investment in East Africa – GlobalData Analyst","author":"Samuel Kamau Mbote","date":"October 30, 2014","format":false,"excerpt":"Kenya will need to focus on providing a competitive and stable fiscal environment if it is to fully exploit its offshore gas industry and attract investors ahead of Mozambique and Tanzania, says an analyst with research and consulting firm GlobalData. Reece Straker, GlobalData\u2019s Upstream Oil & Gas Analyst, states that\u2026","rel":"","context":"In "Top News"","block_context":{"text":"Top News","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/top-news\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/09\/offshore-drilling-rig11.jpg?fit=800%2C649&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/09\/offshore-drilling-rig11.jpg?fit=800%2C649&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/09\/offshore-drilling-rig11.jpg?fit=800%2C649&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/09\/offshore-drilling-rig11.jpg?fit=800%2C649&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":527,"url":"https:\/\/www.oilnewskenya.com\/index.php\/expert-want-oil-expectations-managed\/","url_meta":{"origin":1639,"position":1},"title":"Expert Want Oil Expectations in Kenya Managed","author":"Samuel Kamau Mbote","date":"February 16, 2014","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] Story by Kenya News Agency A Senior scholar on oil matters has underscored the need to manage community expectations as exploration of oil continues. 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