Steve Umidha @steveumidha
The National Treasury will soon table in Parliament a bill to regulate management of oil and gas resources which are expected to earn the country a huge chunk of revenue in the near future.
In his budget speech yesterday, Treasury Cabinet secretary Henry Rotich said the Sovereign Wealth Fund Bill was awaiting Cabinet approval before it is tabled in the august House.
“It is critically important, that we design a framework for managing these new resources to avoid the so-called Dutch disease,” he said, adding: “In this context, we have already completed the Sovereign Wealth Fund Bill which will help us manage the resource responsibly for the current and future generations. We will soon be tabling this legislation in Parliament.”
The bill, drafted by Treasury, seeks to ensure proper management of proceeds from oil, gas and other extractive resources.
Rotich said a seed capital of Sh10 billion was injected into the sector, with a proposal to establish three main funds—stabilisation, infrastructure and development and future generation funds—to boost the country’s oil exportation plans as a revenue generation effort.
The announcement comes two weeks after President Uhuru Kenyatta flagged off four trucks carrying crude oil mined in Turkana fields for exports.
Rotich said the bill seeks to end rows between local communities in Turkana and West Pokot over oil resource. It will address sensitive issues on oil revenue sharing between communities, National and County governments.
“We are working with our private sector partners to develop the necessary infrastructure to evacuate and achieve early monetisation of our crude oil resources. In this regard, work is ongoing for the development of the upstream facilities which include drilling of over 200 production wells and the installation of the necessary oil drilling facilities to allow the flow of 60,000– 80,000 barrels of oil per day,” said Rotich.
Also awaiting Parliament’s approval is, The Petroleum (Exploration, Development and Production) Bill that if passed will see the host communities get five per cent of revenues.