By: Thuo Njoroge Daniel
Gas and oil exploration and production companies in Africa face enormous challenges, ranging from gang extortion in local communities to government regulation and taxation.1 However, the major challenges faced by gas and oil companies that are linked to regulation and taxation include delay in passing important laws and legislation and having segmented and uncoordinated tax regimes.2 With the recent developments in the discovery of oil and gas deposits, East African countries need to be preparing for changing manpower requirements, fiscal policies and new regulations to exploit the benefits brought about by oil and gas production.
Petroleum Contracts in East Africa
Governments in East Africa have been at the forefront in awards of contracts for the commercial exploitation of the discovered oil and gas deposits. The government of Uganda successfully completed the production sharing agreement (PSA) in 2012. Further, the government oversaw the receipt of 14 pipeline bids for the 352 kilometres reversible flow heated oil product pipeline between Kampala and Eldoret in Kenya
In Kenya, the first commercial oil was found in 2013. This followed acceptance of bids to build the 352 km pipeline.5 The government of Kenya gazetted 8 new deep water oil blocks in 2012. The notable developments include the spudding of the first offshore well by Apache in 2012 with 52 million cubic feet of gas discovered …. continue reading by clicking below: