Govt plans Sh103 billion National Oil listing

REUTERSNov 29, 20171 Mins read1.7k

Kenya plans to raise Ksh 103.2 billion (US$1 billion) by listing its National Oil Corporation on the National Securities Exchange and the London Stock Exchange by early 2019, to buy a share of two oil blocks held by Tullow and its partners, a senior government official said on Wednesday.

The country discovered oil in 2012 and full production is expected in 2021 after the completion of a Ksh 2.2 billion (US$2.1 billion) crude oil pipeline linking the oil fields with the proposed port of Lamu on the Indian Ocean Coast.

“We need to raise money for our back-in rights,” Andrew Kamau, the principal secretary for petroleum at the Ministry of Energy, told Reuters.

Back in rights are an option granted to governments to acquire a share of blocks where oil had been struck after an initial sale to firms in the exploration phase.

Kamau did not say what stakes National Oil planned to take up in the oil blocks. He did not provide further details about the listing plans.

Kenya’s National Oil Corporation is a state-owned company that handles the government’s interest in both the upstream and downstream activities in the oil business. It owns exploration blocks and also has petrol stations in Kenya with about a 5% share of the fuel retail market.

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The two oil blocks, 13T and 10BB, are in Turkana county in the far north of the country where oil was first struck in 2012.

They are owned by Tullow, Africa Oil and A.P. Moeller Maersk.

In October, Tullow Oil’s Chief Executive Officer Paul McDade said the company would likely make a final investment decision on its Kenya project in 2019.

The partners aim to start small scale production in the first half of 2018, that would involve trucking about 2,000 barrels a day to the coast. The government has said this was not expected to generate any profit.

The government has also said it plans to issue bonds locally and abroad to raise funds for investment in the petroleum sector.