Editorials

Oil firms purge welcome

MUNYES

Mining and Petroleum Cabinet Secretary John Munyes. PHOTO | FILE | NATION MEDIA GROUP

BDgeneric_logo

Summary

  • Petroleum and Mining Cabinet secretary John Munyes on Friday said the firms had defaulted on the obligations of their respective contracts.
  • The oil and gas companies were exploring in the Lamu Basin on the Indian Ocean territory.

The termination of the contracts of six oil and gas exploration firms for failing to meet targets under the production sharing agreements with the State bodes well for progression.

Petroleum and Mining Cabinet secretary John Munyes on Friday said the firms had defaulted on the obligations of their respective contracts.

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.

The termination of these firms' contracts will certainly inject a fresh sense of responsibility among other exploration firms holding permits in Kenya.

It is common for speculators and briefcase firms to rush to secure exploration permits for selfish reasons.

Such firms mostly use the permits to raise funds in the international markets under the guise of financing projects only to channel the collections to other uses.

Some of them also snap up exploration permits hoping to sell them to third parties at a profit at a later date.

The State must smoke out such speculators and only retain those genuinely committed to exploration works. Applicants for exploration rights should be vetted in the future to lock out speculators.