Kenya to restart licensing of 10 oil and gas blocks in September

Energy CS Opiyo Wandayi before the Senate Standing Committee on Energy to discuss Budget Policy Statement and canvass issues affecting the Energy sector in Kenya at Bunge Towers, Parliament, Nairobi March 4th,2025 (Elvis Ogina, Standard) Kenya is in a fresh bid to lure oil firms to its fledgling oil and gas sector. It now says it has restructured its petroleum exploration blocks paving the way to restart licensing oil companies to explore for oil and gas mostly on the Kenyan coast. The Energy and Petroleum Ministry said it had identified 10 blocks that will be available for the first licensing round in September 2025. The country has been trying to unlock its oil and gas industry. To date, only the Lokichar project in Turkana County has made commercially viable discoveries but that too has faced challenges in progressing to the commercial phase. Energy and Petroleum Cabinet Secretary Opiyo Wandayi last week that 10 blocks will be available for licensing. "We have identified 10 highly prospective blocks, selected based on geoscientific data, which will be available for Kenya's first licensing round set to launch by September 2025," he said. This presents a unique opportunity for investors to explore Kenya's hydrocarbon potential through a transparent and merit-based process. The CS said the blocks are located in the Lamu and Anza basins, which are regions with proven discoveries and significant untapped potential. Petroleum conference Wandayi disclosed the Ministry's plans during the 11th East African Petroleum Conference and Exhibition 2025 (EAPCE 2025) that took place last week in Dar es Salaam, Tanzania. "To support informed decision-making, Kenya has compiled comprehensive geoscientific data, including seismic surveys, geological reports, and well data, all available at the National Data Centre hosted by the National Oil Corporation of Kenya," he said, encouraging investors to explore these resources for deeper insights into Kenya's petroleum potential. Wandayi also assured investors that Kenya provides a stable legal framework, flexible Production Sharing Contract (PSC) terms, and a government dedicated to the sustainable growth of the oil and gas sector. He emphasized that Kenya's focus on transparency and efficiency in the licensing investor confidence remains steadfast. Speaking at the forum, Petroleum Principal Secretary Mohamed Liban said the State will provide incentives to investors in oil and gas exploration to help Kenya maximise benefits from the sector. He said the government is creating a favourable environment by improving regulations, offering investment incentives, and working with international oil companies. The PS emphasized that key infrastructure projects, including the proposed Lokichar-Lamu pipeline and other infrastructure along the Lamu Port-South Sudan-Ethiopia-Transport (Lapsset) Corridor project, including improved transport networks, will lower operational costs and enhance efficiency in the sector. "The government is strengthening the petroleum industry by ensuring that investments are well-supported through better policies and infrastructure," he said. Kenya discovered what it says are commercially viable oil resources in Lokichar, Turkana County in 2012. Tullow, the UK firm that has been in the process of taking the oil to the market, has however experienced challenges and resulted in lengthy delays. The firm is currently looking for a strategic investor, who is expected to steer the projects to its commercial phase. At the same time, Tullow is waiting on the government to okay its Field Development Plan (FDP) that spells out what needs to happen, including investments necessary to see the project through to the commercial phase. While other firms have drilled in different parts of the country and wells show the presence of hydrocarbons, the Lokichar project is the only one that has shown promise. This is despite the long exploration history that dates back to the 1950s when BP Shell Development Company was granted the first oil exploration license in the Lamu Embayment. Through the years, however, the company did not find commercial oil and with time lost interest. In 2002, interest in oil exploration picked up again when three Australian oil firms acquired offshore blocks. At that time, Kenya had 21 oil exploration blocks, seven offshore and 14 onshore. The number of blocks increased to 37 in 2006 and later to 46 in 2012. Liban noted that over the last decade, different firms have drilled 95 wells, with 42 confirming the presence of hydrocarbons.

Kenya to restart licensing of 10 oil and gas blocks in September

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