Documents from the office of Kenya Auditor-General show that the country has earned Sh503.2 million from oil exploration works by foreign firms local media reported.
According to Business Daily Africa, a total of Sh503,260,733 was collected last year as revenue from exploration.
Petroleum Cabinet Secretary Andrew Kamau said “The cash (Sh503 million) came from surface fees and training levies,”
Surface fees are annual payments that explorers make to the government per square kilometer of their exploration oil blocks.
Last week, cabinet approved a plan to produce between 2,000 and 4,000 barrels a day of crude oil in an effort to exploit the country’s oil production potential.
Kenya plans to export its first consignment of crude planned at 2000b/d by June 2017 which will be transported by road. The entire reserves are estimated at about a billion Barrels.
Kenya Oil export plan fell when Uganda, a prospective partner backtracked on an earlier agreement to construct a joint Pipeline.
British explorer Tullow Oil and its partner Africa Oil struck Kenya’s first oil in the northwest town of Lokichar in 2012 that was followed by more recent finds.
Kamau said there were deficiencies in the nation’s royalty payment system according to Business Daily Africa.
Instead, Kenya has product sharing agreements with oil and gas explorers, which outline how revenues would be shared when production commences.
The new Petroleum Bill provides for the creation of a sovereign wealth fund — a government-owned investment vehicle—to hold at least five per cent of the oil revenues.
Credit: Business Daily Africa