NAIROBI, KENYA: The Government is considering splitting the Energy Ministry to create a new docket focusing primarily on commercialising Kenya’s oil.
A highly placed source said yesterday that if actualised, the move would see one Cabinet secretary exclusively take charge of the petroleum docket, with the other taking care of the rest of the energy sector.
The proposal is expected to greatly whittle down the clout of the current Energy Cabinet secretary, Charles Keter, who is a close ally of Deputy President William Ruto.
The energy docket is one of the top three most lucrative ministries. The others are Devolution and the National Treasury.
“We understand the Government is not happy how the early oil scheme and generally the oil sector is being run and the split will provide room to reorganise the ministry into smaller and more manageable units,” the source, who requested anonymity, told The Standard.
The insider said the proposal was already causing tension among top officials at the ministry and is subject to approval by both the Cabinet and the Deputy President, on whose side of the Jubilee coalition the ministry rests in line with an unwritten memorandum of understanding that determines who appoints which ministers and who controls what parastatals.
The Energy Ministry controls some of the cash-rich parastatals in the Government, among them Kenya Power, KenGen, Kenya Pipeline Company, Geothermal Development Corporation, and Kenya Electricity Transmission Company (Ketraco).
These parastatals, most of which are majority-owned by the Government, have assets worth billions of shillings and report significant profits every year, earning the State billions in dividends.
But it is the discovery of oil in Turkana that has elevated the ministry’s importance.
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One of the biggest headaches for the ministry has been the early oil pilot scheme, which besides being a loss-making venture, has also been met by other logistical challenges that saw it suspended.
The project was scheduled to run between mid-2017 and mid-2019.
Cabinet Secretary Keter blamed the suspension of the pilot scheme on the delay by Parliament to pass the Petroleum Bill.
The bill was expected to provide a framework on how the county and national governments, as well as the host communities, would share oil revenues.
The Turkana oil find has run into headwinds, with the local community increasingly getting impatient with the Government’s perceived reluctance to spell out how they will benefit from the oil.
This has raised security concerns for employees of exploration firm Tullow Oil, which was to start moving the crude oil extracted so far from the Turkana fields mid this year.
The oil sector has also had significant challenges in building infrastructure to support the exporting of the crude oil.
This was complicated by Uganda’s pulling out of an initial plan to build an oil pipeline jointly with Kenya.