Kenya will have to wait a little bit longer before it can have a new energy bill that will regulate the petroleum sector with the Bill not expected in parliament before June according to energy and petroleum principal secretary Joseph Njoroge.
The law that expected to be brought in parliament last year in November is being delayed as the ministry says consultations are ongoing with players in the petroleum industry as well as county governments and their representatives with a meeting set for next month.
Kenya which has already struck oil is in the process of revising its two and a half decade old laws with the last updates having been made in 1986 with the first exploitation of the country’s reserves expected to start in 2016.
Oil discoveries in Uganda and Kenya and gas offshore Tanzania and Mozambique have made east Africa attractive to explorers. Britain’s Tullow Oil and its partner Africa Oil Corp have struck oil in northwest Kenya and are in the process of determining commercial viability.
“So by the end of this (fiscal) year, that is by June, we expect to have put everything in place,” Njoroge said.
The law that is being prepared together with foreign consultants Hunton & Williams and Challenge energy is expected to include clearly defined policies for the upstream, midstream and downstream sections to avoid overlaps and reduce inefficiency.
The new law is also expected to clearly guide on natural gas exploitation that is vague in the 1986 update.
The new law is further expected to drive up exploitation of oil and gas in the country with holders of various blocks yet to start exploration with concerns over a lack of a legal and fiscal framework to commercialise the gas.
Meanwhile the signing of an agreement of a new pipeline to transport crude oil to Lamu from Uganda has been delayed from the set date of December last year as a result of ongoing fighting in Southern Sudan
This is as the pipeline is expected to also carry oil from Southern Sudan.
“Without that intergovernmental agreement, it is very hard to proceed, because that pipeline is supposed to pick a lot of quantities from South Sudan, which even makes the project more feasible,” the energy PS said.