{"id":794,"date":"2014-03-25T13:19:48","date_gmt":"2014-03-25T13:19:48","guid":{"rendered":"http:\/\/oilnewskenya.com\/?p=794"},"modified":"2015-09-02T21:13:17","modified_gmt":"2015-09-02T21:13:17","slug":"opinion-tullow-discloses-payments-but-kenya-energy-bill-falls-short-of-making-mandatory-disclosures","status":"publish","type":"post","link":"https:\/\/www.oilnewskenya.com\/index.php\/opinion-tullow-discloses-payments-but-kenya-energy-bill-falls-short-of-making-mandatory-disclosures\/","title":{"rendered":"OPINION: Tullow discloses payments but Kenya Energy bill falls short of making mandatory disclosures"},"content":{"rendered":"

By: Kenya Civil Society Platform on Oil and Gas<\/strong><\/p>\n

In a move internationally hailed as pioneering Tullow Oil has released its annual report including reporting at a project level.<\/p>\n

Tullow in its released 2013 Report has published all the tax, royalty and other payments it has made to the Kenyan government across all levels. In the year ending 2013 it announced that it paid a total of $22 million (approximately 1.8 Billion KES) in taxes to the national government. This is inclusive of VAT, withholding tax on imported services and PAYE on our employee salaries.\u00a0 The amount is also inclusive of $212,000 in license fees. The total payment shows a significant increase in government revenue and indicates a level of increased activity by the Oil Company operating in three basins in Kenya.<\/p>\n

The disclosure goes ahead to indicate a further spend of $48 million on local suppliers as compared to $29 million in 2012. The figure of $3 million (approx KES 258 Million) for undertakings with Turkana businesses is particularly instructive as it shows an enhanced level in local business participation in the Tullow operations. Compared to its global operations Tullow has been very successful in its Kenya operations with 7\/7 Successful wells in country compared to the hitting of some dry wells in its operations globally.<\/p>\n

These disclosures come at an opportune time as Kenya is reviewing its Energy law. Indeed Tullow in its annual report mentions the passage and Approval of Kenya\u2019s Petroleum Legislation as a key milestone towards moving towards production. The energy bill is in its Fifth draft from the commencement of the process in 2012 lacks framework that would create uniformity in reporting in the nascent sector.\u00a0 The energy bill contains a major deficiency as it is lacking in creating a mandatory disclosure regime. While Tullow due to EU and progressive company requirements has reported on a project by project basis the law is silent on compelling other companies in country to undertake similar disclosures. A fundamental flaw is the lack of a ring fencing mechanism this is crucial in assessing the profitability of each project site and will have an impact in the event that the country switches to a different model of sharing revenues. In illustration if government takes on the proposed model based on the ratio of cumulative revenues and expenditures a project based reporting mechanism may make it easier to spot company inefficiencies at project level that will have an effect on government revenues.<\/p>\n

Disclosures can lead to increased government revenues as released data is crowd sourced and scrutinized by a wide range of individuals and organizations. In the medium term a comparative review of revenues across three Tullows site of operation Ghana, Uganda and Kenya (although operating in different conditions) will lead to ascertaining whether indeed maximum benefits of the resources are gained by the governments. Additionally it may lead to cross border sharing of information across African countries enhancing regional integration.<\/p>\n

Regulation is indeed a never ending fight of keeping up with the company and regulators should not only bring national legislation in vogue with practice but must be superior. The Kenyan Energy bill 2014 should go a step further than the United States Dodd Frank Reforms Act and the European Union\u2019s Accounting and Transparency Directives provisions. The Kenyan constitution provides for such enhanced transparency in Article 71 and Article 35 on parliamentary ratification and the freedom to access such information. As Kenya is known for its pre eminence in the region its Oil and Gas law just like its constitution should be progressive and show significant foresight.<\/p>\n

With the Cabinet Secretary quoted indicating that due to commerciality of the finds a push to go towards production should be accelerated it is prudent that a disclosure mechanism is in place.\u00a0 As we shift to production it is crucial that new legislation provides a solid basis for sustainable development of our oil and gas resources.<\/p>\n

While Tullows disclosures are a step in the right direction the Kenya Civil Society Platform on Oil and Gas intimates that for prudent management of the resources disclosures should commence from the concession stage including public disclosure of all agreements.<\/p>\n","protected":false},"excerpt":{"rendered":"

By: Kenya Civil Society Platform on Oil and Gas In a move internationally hailed as pioneering Tullow Oil has released its annual report including reporting at a project level. Tullow … Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":14,"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":[2],"tags":[823,1258,1261,1286,1980,2571,2580,2637,2671],"class_list":["post-794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-elsewhere-in-africa","tag-european-unions-accounting-and-transparency-directives-provision","tag-kenya-civil-society-platform-on-oil-and-gas","tag-kenya-energy-bill","tag-kenyan-constitution","tag-paye","tag-tullow-oil","tag-turkana","tag-united-states-dodd-frank-reforms-act","tag-vat","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2013\/12\/tullow.jpg?fit=276%2C182&ssl=1","jetpack_shortlink":"https:\/\/wp.me\/p5JWkQ-cO","jetpack-related-posts":[{"id":2811,"url":"https:\/\/www.oilnewskenya.com\/index.php\/kenyan-ugandan-contractors-earn-100-million-payments-tullow-oil-report-highlights\/","url_meta":{"origin":794,"position":0},"title":"Kenyan, Ugandan Contractors Earn Over $100 million in payments from Tullow Oil – Report Highlights","author":"","date":"April 14, 2015","format":false,"excerpt":"2,240 suppliers working directly for Tullow in Uganda, Kenya and Ghana took home $255M of the total \u00a0$1.4 billion Spent with suppliers in 2014 according to the latest Corporate Responsibility report by Tullow Oil. Of this amount contractors in Kenya received $81.5 million in payments signifying a doubling in spending\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\/2015\/04\/Tullow-CR.png?fit=399%2C556&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1096,"url":"https:\/\/www.oilnewskenya.com\/index.php\/oil-exploration-contributes-kshs-8-2b-for-kenyan-economy-creates-3000-jobs-tullow-oil\/","url_meta":{"origin":794,"position":1},"title":"Oil Exploration contributes Kshs 8.2b for Kenyan Economy, Creates 3000 jobs – Tullow Oil","author":"Samuel Kamau Mbote","date":"May 28, 2014","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] Businesses across Kenya last year made Kshs 8.2 billion in revenues from supplying services to Tullow Kenya and contractors carrying out oil exploration in the country, a report released today by the firm says. Kshs 4.1 billion came from supplying Tullow Kenya directly, representing an increase of nearly\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\/05\/tullow-report.jpg?fit=605%2C624&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/05\/tullow-report.jpg?fit=605%2C624&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2014\/05\/tullow-report.jpg?fit=605%2C624&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":13443,"url":"https:\/\/www.oilnewskenya.com\/index.php\/is-africa-oil-losing-faith-in-kenyan-venture\/","url_meta":{"origin":794,"position":2},"title":"Is Africa Oil Losing Faith in Kenyan Venture?","author":"","date":"March 14, 2023","format":false,"excerpt":"Whereas South Lokichar's basin Project Oil Kenya has significantly featured in Africa Oil main assets highlights since 2012 this seems to have changed in the last seven months. This is despite hope that the project that is in urgent need for financing ahead of the field development plan approval and\u2026","rel":"","context":"In "Countries"","block_context":{"text":"Countries","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/03\/Kenya-Turkana-Rig.jpg?fit=640%2C360&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/03\/Kenya-Turkana-Rig.jpg?fit=640%2C360&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2023\/03\/Kenya-Turkana-Rig.jpg?fit=640%2C360&ssl=1&resize=525%2C300 1.5x"},"classes":[]},{"id":377,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-partners-plan-kenyan-oil-pipeline\/","url_meta":{"origin":794,"position":3},"title":"Tullow Oil, Africa Oil plan Kenyan oil pipeline","author":"Samuel Kamau Mbote","date":"January 17, 2014","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya'] Story by Business News British energy explorer Tullow Oil said it was discussing an export pipeline with the Kenyan government following the discovery of major oil deposits. Tullow, along with its partners at Africa Oil, said it discovered oil at its Amosing-1 and Ewoi-1 exploration sites in northern\u2026","rel":"","context":"In "News by others"","block_context":{"text":"News by others","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/news-by-others\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8202,"url":"https:\/\/www.oilnewskenya.com\/index.php\/tullow-oil-submits-notices-of-force-majeure-on-kenyan-blocks\/","url_meta":{"origin":794,"position":4},"title":"Tullow Oil Submits Notices of Force Majeure on Kenyan Blocks","author":"","date":"May 18, 2020","format":false,"excerpt":"Tullow Oil Kenya B.V., the operating partner on Blocks 10BB and 13T in Kenya, has submitted notices of force majeure to the Kenyan Ministry of Petroleum and Mining on behalf of the joint venture partners in these blocks. These declarations are the result of impact of the COVID-19 pandemic on\u2026","rel":"","context":"In "Eastern Africa"","block_context":{"text":"Eastern Africa","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/countries\/eastern-africa\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.oilnewskenya.com\/wp-content\/uploads\/2020\/05\/Elmesek-Tausi.png?fit=367%2C353&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":279,"url":"https:\/\/www.oilnewskenya.com\/index.php\/civicon-kenyan-secures-tullow-contract\/","url_meta":{"origin":794,"position":5},"title":"Civicon Kenya secures Tullow Oil contract for roads and airstrips in Turkana","author":"Samuel Kamau Mbote","date":"December 17, 2013","format":false,"excerpt":"[twitter-follow screen_name='oilnewskenya']Story by Kenya Broadcasting Corporation - Civicon Engineering Company (part of TransCentury group) has signed a two year deal with British Oil Company Tullow Oil mandated to explore oil in Turkana County, in a move that will see Civicon involved in drilling of oil wells and opening up roads\u2026","rel":"","context":"In "News by others"","block_context":{"text":"News by others","link":"https:\/\/www.oilnewskenya.com\/index.php\/category\/news-by-others\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/comments?post=794"}],"version-history":[{"count":1,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/794\/revisions"}],"predecessor-version":[{"id":3341,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/posts\/794\/revisions\/3341"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media\/14"}],"wp:attachment":[{"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/media?parent=794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/categories?post=794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oilnewskenya.com\/index.php\/wp-json\/wp\/v2\/tags?post=794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}