State cancels contracts of six energy companies

BUSINESS
By Frankline Sunday | September 11th 2021 | LINK

The government has terminated the contracts of six energy firms for failing to meet their contractual obligations.

In a notice in the Kenya Gazette yesterday, Petroleum and Mining Cabinet Secretary John Munyes stripped the production-sharing contracts of the firms that collectively held nine oil and gas exploration blocks.

Oil pumps.

“It is notified for general information of the following contractors in default of obligations under the respective production sharing contracts, that the cabinet Secretary for Petroleum and Mining on August 27, 2021 issued demand notices and notices of termination in exercise of the powers conferred by sections 10 and 11 of the Petroleum Act and the production sharing contracts,” said Mr Munyes in his notice.

The firms were Zarara Oil and Gas Ltd, Octant Energy (Castor Vall) and Simba Africa Rift Energy, A-Z petroleum, Milio-Castac Oil Ltd and Lamu Oil and Gas Ltd.

Section 11 of the Petroleum Act, 2019 gives the Cabinet Secretary the power to penalise contractors that fail to meet obligations set out in their respective petroleum agreements, including the option of surcharging them where need be.