Petroleum Exploration Policy (Draft 2014)

=Introduction= The draft National Petroleum Policy was published by the Ministry of Energy and Minerals in July 2014. The policy formulation was participatory as it involved several stakeholders through the Petroleum Policy Committee. =Need for the Petroleum Policy= The significant discoveries of natural gas from 2010-2014 with total estimated gas reserves of more than 50.5 TCF have brought about challenges with regard to the sector’s management and policy-making. Some of the challenges include:

- Lack of effective legal and regulatory framework in the petroleum industry

- Inadequate human resources with advanced knowledge and skills in the sector at the local level

- Challenging environment which is conducive for investment, and

- Lack of transparency in all transactions in the petroleum field. =Policy Objectives= The policy’s main objective is to ensure that petroleum resources in the country are explored, produced and utilised for the common good. The policy outlines specific objectives to include the following: - Ensuring transparency in the sector and that all documents are made available to the public

- Ensuring effective and efficient management of the country’s petroleum

- Maximising national benefits and sustainable development of each citizen

- Establishing a mechanism to ensure reliable and affordable supply of petroleum.

=Existing Legal framework= Since petroleum is a cross-cutting sector, the draft policy embraces various policies and legislations which have a direct link with the sector. Some potential legislations which drive the petroleum sector in the country include the Petroleum (Exploration and Production) Act of 1980 (Cap 328, R.E 2002), with provisions on the exploration and production of petroleum; the Income Tax Act of 2004, which provides for the charge, assessment and collection of Income Tax; the  Environmental Management Act of 2004, which provides for the framework to ensure a sustainable management of the environment; and the Occupational, Safety and Health Act of 2003, which provides for safety, health and welfare of persons at work.

=Institutional framework= The policy recognises the importance of key players in operationalising, enforcing, monitoring and evaluating the petroleum sector in the country to ensure the derivation of the desired outcomes. The policy identifies the Central Government (Ministry for Energy and Minerals), which is charged with developing policies, laws, regulations and plans governing the development of the petroleum sector. Other players include the National Oil Company, the Commissioner for Petroleum and Energy Affairs, the Energy and Water Utilities Regulatory Authority (EWURA) regulating the downstream at outset, private sectors, Non-governmental Organisations (NGOs) and Civil Society Organisations (CSOs), the Mass Media, and Academic and Research Institutions in the petroleum industry. =Stakeholders Views on the Policy= The CSOs such as the Interfaith Standing Committee on Economic Justice and the Integrity of Creation, HakiMadini, Policy Forum, Oil and Natural Gas Environment Alliance (ONGEA) have jointly presented their recommendations on the draft policy, which was also seconded by National Resources Governance Institute (NRGI). The recommendations include: - The need and importance of transparency and accountability as the main policy objective

- The need for an effective mechanism to ensure critical mass understanding of the policy

- The financing options for National Oil Company and subsidiaries

- The need for National Oil Company to publish their audited reports and have the company books reviewed by an external independent auditing firm.

=References=