Oil exploration firm headed for collision with residents

Oil exploration firm, Taipan Resources, is headed for a major collision with Wajir County residents, who claim the company has reneged on conditions of its licence.

A group of professionals from the county says the Toronto Stock Exchange listed firm has been insensitive to the needs of the locals while undertaking its exploration activities.

The Wajir South Professional Forum now wants the firm investigated by the Energy Ministry for failure to meet the obligations of its licence. The company has been prospecting for oil in Block 2B in Wajir County, through its wholly owned subsidiary Lion Petroleum.

In a letter to the Ministry of Energy and Petroleum, the association also accuses the firm of corruption in awarding contracts to local companies and added that employment is skewed in favour of select individuals. “Though the company has been allocated the licence to undertake oil exploration in the entire block 2B, it has come to our attention that they are doing exploration and seismic studies only on a portion of the blick and left other sections of the allocated Block 2B,” said Omar Hashi, WASPA secretary in a letter to the Ministry.

“In addition, there is no transparency in the award of small and national contracts by the company since it is flawed with corruption allegation and favouritism. Employment of the locals is always skewed and a section of the community is always left out.”

Mr Hashi added that attempts by the community to iron out its concerns with the company were brushed aside, while local managers look down upon the local community.

“Lion Petroleum does not engage the local community nor treat them with respect. Several attempts by the elders to voice their concern to the company or ask for clarifications were thwarted by the company managers who always treat the community in a condescending manner,” said Hashi.

“We are therefore appealing for you to intervene and ensure this company meets their obligations and addresses the concerns of the local community.” The firm has a 30 per cent stake in Block 2B where it is also the operator. In addition the Company maintains a 20 per cent interest in Block 1 in Mandera which is currently operated by Afren plc.

Regular reporting

It is not the first oil explorer to face off with local communities that fear they might lose out on the oil windfall that is expected in the country. Other firms have been sanctioned by the Energy Ministry for failure to meet the terms of their licences that include keeping to stipulated timelines, regular reporting to the ministry and investments in the local communities. Attempts to get comments from Taipan Resources were unsuccessful as they did not return our calls. Tullow Oil, which has been the most successful exploration firm in the country, has faced a number of unrest from the Turkana community that has in the past complained that it has been sidelined in hiring and award of the contracts by the UK based oil firm.

The locals at one time forced the company to suspend operations at two of its blocks after they stormed in to protest what they said was unfair treatment to locals in hiring and award of contracts. Another Canadian firm Vanoil had its licence cancelled over what the ministry said was failure by the firm to meet the minimum work requirements. The firm has since soughtcompensation from the State.

In an October Update, the firm said it is seeking not less than $150 million (Sh13 billion), which it termed as “full and proper restitution for its seven years of exploration and development, based upon the net present value of its investment in Kenya”.