Economy

Munyes terminates contracts for six oil and gas exploration firms

zara

Zarara Oil and Gas drilling equipment in Pate Island. FILE PHOTO | NMG

Petroleum and Mining Secretary John Munyes has terminated the contracts of six oil and gas explorers for failing to meet targets under the production sharing agreements.

In a Gazette notice dated August 27, Mr Munyes said the contractors had defaulted on obligations under their respective contracts.

Section 11 of the Petroleum Act empowers the CS to issue notices for termination of contracts where a contractor has failed to meet their obligations. The law requires the minister to notify the contractor in writing.

“That the Cabinet Secretary for Petroleum and Mining on the 27th August, 2021, issued demand notices and notices of termination in the exercise of the powers conferred by sections 10 and 11 of the Petroleum Act and the production sharing contracts,” the gazette notice reads.

The oil and gas companies were exploring in the Lamu Basin on the Indian Ocean territory. They are Zahara Oil and Gas, which had been allocated two blocks, Octant Energy, Simba Africa Rift Energy, A-Z Petroleum Products, Milio/Castac Oil and Lamu Oil and Gas.

Oil and gas exploration in the country began in 1956 and the breakthrough came in March 2012 with the discovery of oil in Lokichar, Turkana County.

Kenya has four petroleum exploration basins including Lamu, Anza, Mandera and Tertiary Rift Basin.

There are 63 gazetted petroleum blocks within these larger basins, 26 of which are currently licensed to 14 international oil companies while one is licensed to the National Oil Company.

Prospecting companies have drilled 13 offshore exploration wells in Lamu but without a commercial discovery as yet.