State cancels contracts of six energy companies
Business
By
Frankline Sunday
| Sep 11, 2021
The government has terminated the contracts of six energy firms for failing to meet their contractual obligations.
In a notice in the Kenya Gazette yesterday, Petroleum and Mining Cabinet Secretary John Munyes stripped the production-sharing contracts of the firms that collectively held nine oil and gas exploration blocks.
“It is notified for general information of the following contractors in default of obligations under the respective production sharing contracts, that the cabinet Secretary for Petroleum and Mining on August 27, 2021 issued demand notices and notices of termination in exercise of the powers conferred by sections 10 and 11 of the Petroleum Act and the production sharing contracts,” said Mr Munyes in his notice.
The firms were Zarara Oil and Gas Ltd, Octant Energy (Castor Vall) and Simba Africa Rift Energy, A-Z petroleum, Milio-Castac Oil Ltd and Lamu Oil and Gas Ltd.
Section 11 of the Petroleum Act, 2019 gives the Cabinet Secretary the power to penalise contractors that fail to meet obligations set out in their respective petroleum agreements, including the option of surcharging them where need be.
READ MORE
Treasury to cut borrowing, spending on shortfall in revenue collection
State to shut down 25 entities, privatise others in new reforms
Why Kenya must move fast to invest in digital rights security
State, workers' pay tensions cloud function
Why the super-rich are ditching commercial property investments
S Sudan Central Bank Governor Rallies East Africans to Invest in Juba
Co-op Bank lines up billions for women-owned SMEs after German loan deal
Construction players protest state's bid to tax mining sector
Insurance sector players to explore use of AI in deepening uptake
Sugarcane farmers accuse AFA of 'siding with cartels' as prices drop
“Where a contractor fails or neglects to comply with the direction of the Cabinet secretary in accordance with this section the Cabinet secretary may cause to be done all or any of the things required by the direction to be done and the costs and expenses incurred in doing these things shall be a civil debt due to the national government from the contractor,” the section says.
The terminated firms were part of 19 companies that the government granted production-sharing contracts on 35 out of the 63 exploration blocks.
According to data from the Ministry of Energy, 56 exploration wells have so far been drilled across the country located in the Lamu, Mendera, Anza and Tertiary Rift basins.
Out of the 56 wells, 30 indicated traces of hydrocarbon with more than 17 known oil seeps across all four basins.
- Mithika Linturi's ouster exposes cracks in Kenya Kwanza
- State to shut down 25 entities, privatise others in new reforms
- Sugarcane farmers accuse AFA of 'siding with cartels' as prices drop
- Forget miraa: Discovery of minerals stirs up Meru locals