In a notable move to bolster regulatory control in Kenya’s energy sector, the government has formally granted powers to the Energy and Petroleum Regulatory Authority (EPRA) for overseeing the country’s crude oil industry. Contained within the Statute Law (Miscellaneous Amendments) Bill of 2023 are proposed changes aimed at amending the Energy Act of 2019. This step underscores the government’s commitment to refining existing legislation that governs this crucial resource.
A pivotal amendment involves the removal of the phrase “except crude oil” from the Act, empowering EPRA to broaden its regulatory scope to include the upstream oil sector. This legislative change is integral to Kenya’s aspirations in navigating the complexities of becoming a significant oil producer.
The Energy Act of 2019 delineates EPRA’s current mandate, encompassing the regulation of activities such as the importation, refining, exportation, transportation, storage, and sale of petroleum and petroleum products, with the exclusion of crude oil. Simultaneously, EPRA oversees the generation, importation, exportation, transmission, distribution, and supply of electrical energy, excluding the licensing of nuclear facilities.
Daniel Kiptoo, the Director-General of EPRA, clarifies that since its inception, the agency has actively regulated the crude oil sector. The oversight exclusion, resulting from amendments during a 2019 debate on both the Petroleum and Energy Bills, is now under scrutiny, with an emphasis on the proposed amendment serving as a rectification to an inadvertent error within legislative processes.
The Petroleum (Exploration, Production, and Development) Bill of 2017, which proposed the establishment of the Upstream Petroleum Regulatory Authority (UPRA) for this purpose, is where EPRA’s exclusion from crude oil regulation finds its genesis. The final version of the Petroleum Act omitted UPRA; however, it did not confer on EPRA its upstream role, a legal void that the current proposal aims to rectify.
Playing a pivotal role in the allocation of oil exploration licenses to companies investigating crude oil and gas across various offshore and onshore blocks in Kenya, EPRA stands at the forefront. Currently reviewing a revised Field Development Plan submitted by Tullow Oil, a distinguished British firm, EPRA plays an indispensable role in directing the commercial development strategy for hydrocarbon resources within the South Lokichar Basin’s 10BA, 10BB, and 13T situated territories.
EPRA’s historical oversight of the crude oil sector, lacking legal backing, necessitated the proposed amendment, a crucial step toward aligning regulatory practices with an evolving energy landscape. This development not only fortifies EPRA’s role but also positions Kenya as a significant player in the global energy market, a part of ongoing positioning efforts.