We wish to inform our esteemed business associates, customers, friends and the general public, that National Oil Corporation Head Office relocated to new premises. The new offices are at  AON Minet House, Mamlaka Road, Off Nyerere Road, 5th and 7th floors. The contacts in the new premises are as listed below:

 

Post Office Box:	58567 00200 Nairobi
Landline tel. (pilot):	6952000
Fax:	6952400
Mobile:	0734333000/0722203747
Managing Director:	mdnock@nockenya.co.ke
Marketing and Sales:	sales@nockenya.co.ke
Exploration:	explo@nockenya.co.ke
Human Res. & Admin:	hr@nockenya.co.ke
Finance:	finance@nockenya.co.ke
Supply & Operations:	supply@nockenya.co.ke
Website:	www.nockenya.co.ke

 

Our new offices are part of our efforts to promote an efficient commercial culture as we lift the image of the Corporation. We are now more accessible and our teams are working more efficiently through the new open plan office system.

This award was conferred by H.E. The President is a reflection of our hard work, teamwork and sheer determination. We thank our shareholders, partners and stakeholders in making this a reality. At NOCK we pride ourselves in working as a team, both board and management, with a vision to be the leading integrated national oil company in the region. We are committed to delivering even greater value to our shareholders in years to come.

 

 

National Oil moves to contain fuel shortage

December 30^th, 2008..... National Oil has today announced measures to curb the fuel shortage being experienced in the country.

 
The Oil marketer has further distanced itself from the blame game directed at the Oil marketers saying that it was doing everything possible to ensure no stock outs are recorded at its stations.

Speaking to the press Deputy Managing Director Mrs. Sumayya Athmani, said that National  Oil was ensuring that it received daily pump-overs of fuel from Kenya Pipeline to the maximum capacity of the National Oil tanks at its depot and that the products are then immediately delivered to the National Oil stations.  In addition, adequate arrangements have been put in place, including working at the depot over the holiday period, to ensure its Stations receive regular consignments of products to ensure that motorists do not miss products at the service stations.

 
The Corporation whose mandate is to be the price stabilizer in the country, seeks to ensure that Kenyans receive quality products at a fair price

“as a result of our deliberate effort to maintain lower pump prices, we are pleased to note that other oil companies in the country have been forced to take the cue and drastically reduce their pump prices. We shall continue to offer quality products at competitive prices as well as ensure that our customers have excellent service”

 
She commented that National Oil’s vision is to serve Kenya’s energy needs and that this was evidenced by the fact that over the last several weeks, National Oil had sourced and provided more products to its service stations than other marketers with significantly larger networks.

 
However Mrs. Athmani said her organization was largely incapacitated by a smaller market share compared to the multinationals that had bigger presence in the country. She says for the Corporation to have a more influential position in the market and serve Kenyans even better, then a larger market share was the only solution hence its aggressive expansion campaign.

 
“We are also pleased that we have won the December industry tender to supply the country with diesel. Kenyans should expect more cuts in pump prices come January as a result and as we continue with our expansion program.”

For more details please contact Chris Karanja, Corporate Affairs Executive on 6952231 0722 217466

The appraisal was done by an independent evaluator commissioned by the Government of Kenya, and was based on the performance contracts that were signed between Boards of Directors of State Corporations and the Government as the shareholder.

National Oil is a state owned corporation that is mandated to undertake oil exploration, as well as running a thriving retail and distribution sector business and being the national data bank on Kenya's exploration and production industry. National Oil has invested in recruiting and developing high calibre, commercially driven employees responsible for achieving these results over the past 3 years.

The major achievements include:

• Return to profit for 3 years running after a six year loss of over Kshs. 1.6 billion
• Significant volume growth of over 500%
• Improvement in service delivery at the Nairobi terminal leading to increased throughput of over 100%
• Reduction of operating expenses by close to 40%
• Development of a comprehensive strategic corporate plan
• Certification of a backlog of 6 years Annual Accounts since 1997/98
• Balance sheet cleanup
• Obtained a Distinguished Taxpayer certificate
• Successful, highly efficient and rationalised staff structure
• Launch of a comprehensive new website

In addition, National Oil moved its headquarters to modern, open plan, efficient facilities, with excellent working conditions for staff reflective of its shift towards a more business-like orientation.

The success National Oil has enjoyed over the past year would not have been possible were it not for its supportive board of directors, wo have been given strategic direction and steered the management team with a unity of purpose to make these achievements possible. in 2005, National Oil was awarded the Lioness of Africa award for aggressive promotion of Kenya oil exploration acreage to the international oil industry.

The board of Directors of National Oil comprises, Peter K. Munga Chairman, who is well known businessman and founder Chairman of the successful Equity Bank. Mr. Shadrack Seba a civil service veteran, Mr Peter Ngatia, deputy under secretary - Ministry of Energy, Mrs  Anne Mugo, Pensions Secretary representing the PS Ministry of Finance. Eng Ngeso Okolo and Eng. George Chiuri who both have an extensive oil industry background of over 25 years. Mr Salim Suleman, who is an aircraft engineer and a successful businessman in the ICT sector. Also on the board is Ms. Fatuma Hassan, a prominent businesswoman and a recognized women'd leader. Mr. Chris A. Makhoha -the State Corporationd Inspectorate representative and Mrs Mary M'Mukindia the National Oil Managing Director.

It is with a vision to become the leading national integrated oil company in the region that we commit ourselves to continued hard work and determination and delivery of greater value to our shareholders.

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	69.00	69.50	58.00	48.00	69.00	69.50	58.80	48.80	70.00	70.50	59.00	48.50	70.00	70.50	59.00	48.00

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK Prop.	68.00	68.50	57.90	48.00	68.00	68.50	58.50	48.80	69.50	69.50	59.00	48.50	69.80	69.60	58.90	48.00

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	67.50	68.50	55.40	47.00	68.00	68.50	57.00	48.80	69.50	69.50	58.00	48.50	69.80	69.60	57.00	48.00

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	67.00	68.50	56.00	45.00	68.00	68.50	57.00	47.00	69.50	69.50	58.00	48.00	69.80	69.60	57.00	48.00

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	67.50	68.50	56.00	45.00	68.50	68.50	57.00	46.50	69.50	69.50	58.00	47.00	69.00	69.60	57.50	46.50

* Prices exclusive of transport
* Prices in Kenya Shillings

 

To read the article click here

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	67.50	68.50	56.00	45.00	68.50	68.50	57.00	46.50	69.50	69.50	58.00	47.00	69.00	69.60	57.50	46.50

* Prices exclusive of transport
* Prices in Kenya Shillings

 

To read the article click here

 

 

 

 

 

 

 

The Chairman and the entire board of the National Oil Coporation of Kenya wish to express their sincere gratitude to the Managing Director, Mrs Mary M'Mukindia, who has opted not to accept the renewal of her contract at the National Oil Corporation of Kenya. The contract s due to expire on April 6th 2007.
Meanwhile, the board has appointed the Finance Manager - Mwendia Nyaga as the acting Managing Director pending formal recruitment of Mrs. M'Mukindia's successor.

During those four years, Mary has steered National Oil and achieved a dramatic turn-around, transforming the corporation into one of the best performing state corporations after many years of losses. National Oil Corporation took the third position in the year ending June 2006 out of 116 state corporations, a strong confirmation of Mary's dynamic stewardship.

Last December, His Excellency President Mwai Kibaki conferred on her the Order of the Moran of the Burning Spear in recognition of her exemplary work at National Oil and her outstanding achievements in the oil industry.

The Board is also delighted to note that Mary's outstanding contribution to the oil industry has been internationally recognized through her recent appointment as the first woman in-coming chairperson of the World Energy Council Programmes Committee.

Mary has achieved further international and local recognition for her accomplishments. In Nov 2005, she was awarded the Lioness of Africa Award for contribution to African Petroleum and Excellence by Duncan Clarke and Partners, at the African Upstream Conference in Cape Town.

The Board has been extremely impressed with her performance over the years in the short time she has been Managing Director of National Oil. The Board is happy to note that Mary will still be active in the oil industry as a consultant and entrepreneur and looks forward to interacting with her.

Mary leaves a strong competent and visionary management team that will continue to steer the Corporation to even greater heights and prosperity.
The Chairman and entire board of National Oil Corporation extend their sincere gratitude to Mary for her dynamic and dedicated service to National Oil Corporation and wish her every success in her future endeavors.

 

ENDS

 

National Oil to supply KENGEN with Kshs 7.5B worth of Fuel

March 23^rd, 2009..... National Oil Corporation of Kenya has signed a contract with Kenya Electricity Generating Company (KENGEN) for the supply of over 170 Metric tones of automotive gas oil (AGO0 to emergency power plants in Embakasi and Eldoret.

  The deal worth over Kshs 7.5Billion will see the oil marketer supplying 153 Metric tones of diesel to Embakasi 1 60MW and Embakasi 11 50MW for a period of nine months while Eldoret plant of 36MW will be supplied for 3 months.   Speaking during the signing ceremony National Oil Managing Director Mwendia Nyaga noted that the supply of diesel to the emergency power plants by his organization would eventually lead to Kenyans accessing more affordable power. He noted that his organization whose purpose was to stabilize petroleum supply would see its role spread to the electricity sector by supplying affordable products to the generating company.   “Handling of such enormous business is a sign that National Oil has come of age, we were the most competitive in quoting for this project and we do hope that this affordability will be passed on to the common Mwanainchi through a reduction in power prices. Our role is to stabilize the petroleum market and we will be glad to extend the same to the whole energy sector,” said Mr. Mwendia.   KENGEN Operations director who signed the agreement on behalf of the generating firm noted his appreciation to the oil marketer but was quick to note that the job was challenging. He expressed his hopes that National Oil would work together with the previous supplier Total Kenya in ensuring a seamless take over.   “We did have an overwhelming response from the oil marketers with a record 8 companies presenting their bids, National Oil emerged tops after the financials were opened on the 10^th of February. The technical evaluation also had National Oil performing quite competitively and we are pleased to award this tender and look forward to a successful project,” noted KENGEN Operation Director Richard Nderitu.     The tender sought new fuel suppliers for emergency generators after Triton Petroleum went under late last year. The first delivery is expected on 1^st of April 2009.  

“At National Oil we are strategically expanding and this is just one of the many starts that the Corporation will be unveiling this year,” concludes Mr. Nyaga

ENDS

For more details please contact Chris Karanja, Corporate Affairs Executive on 6952231 0722 217466

 

To read the article click here

The Kenya Pipeline Company’s capacity to pump oil is overstretched, making further uptake of fuel impossible. This is the reason for the current fuel shortage in parts of the country.

Energy minister Kiraitu Murungi said yesterday, that there is enough fuel in the country, however, this is faced with transportation and distribution problems.

“There is sufficient petrol and diesel in the country. The problem is in transport and distribution. Kenya pipeline is operating at maximum capacity and cannot pump more because of constrained capacity,” he said.

Addressing journalists after a luncheon organised by Petroleum Institute of East Africa (PIEA) at local hotel, Kiraitu said his ministry was encouraging oil tankers to pick up stocks from Mombasa for transport to Kampala.

“We are also encouraging the private sector to use the railway system in transportation of their stocks.”

The minister said the demand of fuel in the country and neighbouring countries had outstripped the capacity of the pipeline.

“The demand for fuel in Kenya, Uganda, Rwanda and Democratic Republic of Congo (DRC) has gone up and is not in tandem with the supply capacity,” the minister said.

He added that the domestic demand for petroleum products has risen by 14 per cent per year, from 2.37 million tonnes in 2004 to 3.06 million tonnes in 2006.

The pipeline currently pumps 500,000 litres per hour and contracts to instal four booster pumps to increase its capacity to 880,000 have already been awarded.

Construction is expected to be completed by December this year. The system will be fitted with a communication and data acquisition to monitor product flow within the pipeline network by June 2008.

The minister was speaking as reports indicated that 25 fuelling stations in Nairobi had run dry of fuel, as others rushed to increase pump prices following a shortage of fuel and a resulting increase in demand.

The Kenya Independent Petroleum Dealers Association chairman Keith Ngaruchi, said retailers were finding it difficult to procure fuel as re-sellers were demanding that each retailer buys over 10,000 litres of either petrol or diesel.

The minister said that currently, he had no powers to control fuel prices, because his hands were tied by the law.

He could only do so when the new Energy Act comes into force in July, he said. In the meantime, he said, he has requested dialogue with oil companies to agree on the prices.

The minister also revealed that plans to construct a 6,000 Metric tonne modular LPG import handling and storage facility in Mombasa were at an advanced stage. 

The construction will be done through a public-private partnership, in which the principal investors will be the KPC and the Kenya Petroleum Refineries Ltd.

Interested private sector LPG marketing companies are expected to participate in the venture, the minister said. 

 

It is also anticipated that the facility will significantly lower consumer prices of LPG by reducing the high freight tariffs and demurrage charges currently incurred during transfer of LPG at the Port of Mombasa on account of limited storage capacity, the minister said. 

While the price of LPG was lower than that of other petrol products in the international market by an average of US$ 200 per metric tonne, the equation changed on landing in Mombasa, due to the small cargo sizes and high handling charges, he explained.

 

 

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NATIONAL OIL curr.	68.50	68.80	58.50	47.00	68.50	68.50	57.50	47.00	69.50	69.50	58.50	48.50	69.00	69.60	57.50	46.50

* Prices exclusive of transport
* Prices in Kenya Shillings

OPEC dismissed calls Monday to pump more crude, saying supply was enough and demand for its oil this year would be less than previously forecast.

Oil consumers, as represented by the International Energy Agency (IEA), have been urging OPEC members to open the taps to refill inventories and lower prices. US crude futures have jumped to $64 a barrel from below $50 in mid-January.

In its April monthly oil market report on Monday, OPEC cut the forecast for demand for its oil in 2007 by 120,000 barrels per day to 30.28 million bpd and said pumping more crude would not solve gasoline supply problems.

“In contrast to the current tightness in the gasoline market, global crude oil fundamentals appear to be largely in balance at current OPEC production levels,” the report said. “Given ample crude supplies, it is clear that increasing production would only serve to build crude oil inventories and would not resolve the tightness in the downstream.”

In the United States, the top oil consumer, rising gasoline demand and refinery outages have drained inventories and pushed up prices. Oil traders focus on US gasoline supply in spring and summer as demand grows ahead of the summer holiday season.  

 

OPEC President Mohammed al-Hamli also said on Monday at a conference in Dubai that crude supply was enough although the group stood ready to lift output if needed.

Inventories

“Oil supply is adequate. The market is well-supplied,” Hamli said in response to a question about falling US inventories. “We are ready to supply more if the market needs more.” Oil prices were trading higher today, with US crude up 38 cents at $64.01 a barrel.

The drop in OPEC’s forecast for demand for its crude in 2007 stems from an increase in its expectation for supply from non-member countries, such as Mexico. Non-OPEC supply is expected to average 50.72 million bpd this year, up 1.26 million bpd from 2006 and 83,000 bpd higher than expected last month. 

 

 

 

  

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NATIONAL OIL curr.	69.50	70.80	61.50	49.00	69.50	70.50	60.50	49.00	70.50	71.50	61.50	50.50	70.00	71.60	60.50	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

 

The National Oil Corporation (NOCK) is scouting for a partner to drive its oil exploration plans. This is the latest attempt by the Government agency to explore for oil after previously efforts a hit a dead-end.

NOCK Acting Managing Director, Mr. Mwendia Nyaga, told The Standard yesterday that the company has concluded negotiations with a key player in the global oil drilling business to jump-start the search for the commodity.

However, Nyaga refused to name the company involved, but explained that the new partner is expected to drill on a long-term basis.

The drilling he said, would be conducted in Malindi and Lamu.

“We are still negotiating with the partner and one of our key plans is to grow our upstream operations,” in a Nairobi hotel, where the corporation was giving details of mid-term review of the Rapid Results Initiative (RRI).

If the company manages to tie the deal with new oil explorer, it would be the second time that the Government agency will be dipping itself into the oil drilling business after another firm, Woodside Energy, failed in the last attempt even though there is conviction within the Government circles that Kenya might strike it rich and find oil along the coastal area.

Nyaga announced that the company had conducted a mid-term review of its operations under the RRI, which was launched in February this year by the Government.

The RRI is an initiative aimed at addressing key weaknesses in service delivery by Government ministries. The Initiative is being rolled out and targets parastatals and other State departments.  

 

Nyaga says that NOCK’s review had shown that the company had achieved 69 per cent increase in customer satisfaction, which was way beyond the 20 per cent it had targeted. Even though, it will cost the company Sh 140 million to implement the RRI over the 100-day period, Nyaga said the company was laying the ground for future profitability margins.

According to the mid-term review, the firm was on the way to achieving its targets.

Top of the list is the need to double its retail network. So far, NOCK’s target is to have 32 outlets. The company has also managed to increase its stations seven to 12.

“This tremendous growth has had positive impact in terms of increased volumes from the stations and improved revenue earnings,” Nyaga said.

 

 

The fuel industry’s game of musical chairs that has been playing since British Petroleum announced plans to exit Kenya will come to a close this morning when Kenya shell completes its takeover of BP’s assets.

It is the culmination of nearly two years of high stake backroom battles that saw Finance Minister Amos Kimunya initially block the deal, citing a possible breach of monopoly and competition rules only to approve it a few months later. The minister’s round the clock trip on the BP buyout raised eyebrows particularly because no significant change occurred in the market share structure in the intervening period to warrant the change of heart.

People close to the decision to block Kenya Shell from acquiring its long time business partners assets said it was prompted by a war between the players on the matter unrelated to the deal.

“ It was the government’s way of getting back to Mr. Patrick Obath, the managing Director of Kenya Shell, for leading the industry in the fight against new tax measures introduced in the petroleum sector in the 2005 Budget,” an industry source, who did not want to be named said.

The new measures involved upfront payment of VAT and import duty for petroleum products on transit, a move that the companies opposed on the grounds that it would increase their operation costs. The ensuing battle the Kenya Revenue Authority and Petroleum Companies culminated into an acute shortage of fuel in the country in the last quarter of 2005.

Kenya Shell is this morning expected to unveil a market strategy involving a re-branding of the company’s stations to reflect the new ownership under Shell Plc.

 War Chest

The company is expected to replace BPs’ green and yellow colors with Red and Yellow and has already put up a multi million shilling war chest to build visibility in an increasingly competitive oil market.

 

Kenya Shell is expected to cede at least 13 0f its 130 retail service outlets and focus its attention on low worth stations outside Nairobi and Central Province. Mr. Mwaura Ngaari, the Kenya Shell regional affairs manager, declined to go into details of the transactions, saying only that the company would lay bear everything today.

 “ Everything will be given to you tomorrow (today),” he said.

 

Mr. Obath had earlier told the Business Daily that the company planned to take market leadership with a wide product range and cutting edge technology from its global operations.

“our aim is to be the best in the region,” said Mr. Obath

The firm has over the past five years ceded the market leadership position to Kenol/Kobil, which of late has hit the expansion trail outside Kenya.

Shell/BP controls 19.6 per cent of the oil market and Kenol/Kobil has 20.5 per cent while Total and Mobil (Tamoil) have 17.1 and 10.8 respectively. Caltex (Chevron) has 14 per cent with the remaining 17 being controlled by the independents.  

 

Earlier attempts by the two partners to seal a merger deal were blocked by Mr. Kimunya on concerns that the arrangement would breach the monopolies rules.  

 

Shell did not buy the verdict and referred the matter to the price and Monopolies appeals tribunal for arbitration as it argued that the deal would not alter its market share given that the two entities have been running a single venture.

But on April 5 2006, Mr. Kimunya reversed the decision and gave the deal a green light but with a catalogue of conditions. The Kenyan BP arm, which was jointly run with Shell on 50/50 joint venture, last year put up its interest on the auction block and invited bids for a possible buyout.

 

The joint venture assets included Kenya Shell, BP Kenya limited and Shell BP (Malindi) were engaged in marketing of fuels, bitumen and LPG and supported by two main terminals and the 130 outlets

 

However, the purchase, Whose financial details have been kept under wraps, excluded the 17 per cent stake at Kenya Petroleum Refineries that BP shares with the government and other oil majors including Total and Kenol / Kobil.

The two Oil giants have been running their Kenyan business under a management partnership, where Shell has provided the managing director for the joint venture over the past 30 years.

A string of oil Marketers had expressed interest in acquiring the assets in the race to shore up their market share.

The National Oil Corporation of Kenya (NOCK) had been listed as a top contender for purchase of the assets but the state owned firm bowed down citing the lack of cash. Kenol/Kobil had also entered the race but pulled out after it emerged that Shell would have a hand in the management of the asset.

Other firms that had expressed interest were Triton Petroleum and Gapco, which raised the stakes by claiming it had offered $100 million for the business.

 

Mr. Obath noted that it was going to be difficult for other players to acquire the assets since it involved the sale of shares owned by BP in the joint company rather than the assets.  

 

The decision by the BP to pull out of the region has been informed by the thinning margins in the local oil industry pulled down by competitive pressures and fresh regulatory rules fronted by the Government.  

 

The National Oil Corporation of Kenya (NOCK) is set to be one of the biggest winners in Kenya Shell’s takeover of BP assets in Kenya, it emerged yesterday.

 

 

 

The NOCK factor was, in fact, critical in Finance minister Amos Kimunya’s change of heart in allowing the deal he had initially blocked citing a possible breach of monopoly rules.

 

 

It emerged yesterday that Mr. Kimunya had prevailed upon Kenya Shell to cede a tenth of its 130 petrol stations to state-owned  NOCK, before being allowed to buy out its long term trading partner BP’s assets.

 

Mr. Kimunya had refused to endorse the merger last year, arguing that the combined unit would breach existing laws on control of monopolies. Critics said this position was wanting least because the merged unit would have only 19.6 per cent of market, compared to market leader Kenol/Kobil 20.5 per cent.

 

 

 

“We have received the government’s conditional approval to take over BP business,” Mr. Patrick Obath, the Chairman and Managing Director of Shell/BP said. The Minister’s nod paves the way for Kenya Shell to acquire BP’s 50 per cent shareholding in the joint venture that consists of Kenya Shell, BP Kenya and Shell and BP Malindi Kenya Limited.

 

 

 

The caveat will see NOCK acquire 13 stations currently held by BP/Shell, including four in Nairobi, fostering NOCK’s strategic goal to raise its market presence to counter perceived price fixing by international oil marketers.

 

 

 

We are talking to NOCK and our previous differences will not affect the ongoing negotiations,” said Mwaura Ngaari, the external affairs manager for Shell. NOCK had last year confounded the industry when it joined the queue for BP’s assets before differences over due diligence stalled its participation.

 

NOCK is aiming at increasing its network distribution from seven to 32 outlets. The acting Managing Director, Mr. Mwendia Nyaga, said the network stands at 12 outlets with nine others under construction. The BP/Shell stock would achieve the target with 34 stations.

 

Under NOCK’s Rapid Results Initiative (RRI) launched earlier in the week, network expansion is one of the five strategic goals to be achieved in 100 days, meaning the takeover of the 13 stations should be concluded before august.

 

The Shell-BP swap has been entangled in controversy with the government initially declining to endorse it on the grounds that it would create a monopoly. Shell countered that the two had been operating as one entity for 30 years, adding that the move was only administrative. The matter was referred to the Price and Monopolies appeals tribunal, which ruled in favour of Shell.

 

 

 

Mr. Simonyi reversed his early decision and allowed the deal to go on condition that Shell cedes 13 outlets to NOCK. BP had fallen out with NOCK when it refused to allow the corporation to carry out due diligence on their books. Because of the joint management of BP Kenya and Kenya Shell, due diligence would have given the auditors and potential competitors a sneak preview of the affairs of Kenya Shell, which was not on the auction board. “We wanted to check the company profile in order to determine what price we were willing to pay for the BP held assets,” Ms Mary M’Mukindia, the former NOCK CEO told Business Daily in an earlier interview. Shell has also set its sights on expanding its operation across the country as it seeks to regain market leadership in an industry where margins are thinning out.

 

 

 

Mr. Obath said the ceding of 10 per cent will cause a temporary blip in the company operations. “Our operation will be affected, but we intend to open up more stations especially in Western Kenya.” Shell will rebrand the 60 outlets that were run as BP and phase out all BP lubricants from the market.

 

Major oil companies walked out of the rural market in the mid 1990s following liberalization of the oil industry which ushered in independent players, who squeezed out the big boys through cut throat competition on prices. The big boys voiced their displeasure by claiming that the independent players were evading tax and that they were retailing in dumped products. Following the introduction of the Simba System by the Kenya Revenue Authority, dumping incidents have declined.

 

Together with upfront payment of excise duty for petroleum products destined for the neighbouring countries, formal players have been given a lifeline.

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NATIONAL OIL curr.	69.50	70.80	61.50	49.00	69.50	70.50	60.50	49.00	70.50	71.50	61.50	50.50	70.00	71.60	60.50	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

The report released by a State-owned research think-tank, the Kenya Institute for Public Policy Research and Analysis (Kippra), says that there is not enough consultation in the planning, and that it does not incorporate critical social and environmental issues into the other sectors... ''The process is neither systematic nor well-organised and inaccurate. Figures are used for projections," it adds. In the document titled, “Enhancing Capacity for Integrated Assessment and Planning: The Case of the Energy Policy in Kenya”, Kippra calls for the restructuring of the current energy policy making to make production sustainable. The document stresses the need to develop recommendations for addressing the harmful economic, social and environmental effects of poor planning. It proposes subsidies to organisations worst-hit by the high energy cost, especially the poor and small companies. The document says tax exemptions or rebates may also be used to encourage or discourage the production and use of certain fuels. "In this case, there is need for deepening the reforms associated with zero-rating of kerosene and cooking gas," it says. The move, Kippra says will reduce deforestation, as households will use more of the fuels instead of fuel wood. Although zero-rating of liquefied petroleum (cooking) gas may not reduce fuel wood consumption, the report notes increased use in towns will reduce pressure on forests and fuel wood scarcity in the rural areas. It says charcoal continues to be harvested from trust lands and gazetted forests, representing an annual business worth Sh17 billion. "Improved charcoal production technology has had minimal impact on recovery and production," Kippra says. Charcoal accounts for about 47 per cent at the national energy consumption, or 82 per cent in towns and 34 per cent in the rural areas. The total charcoal consumption is about 2.4 million tonnes (67m or 67 million 36-kilogramme bags. According to the Kippra acting executive director, Dr Moses Ikiara, of the total energy consumed in the country, wood fuel accounts for 70 per cent, petroleum 21 per cent and electricity a nine per cent of the national consumption. The report criticises energy planning for focusing on electricity at the expense of the other energy sources. Kippra says the current energy policy will have great social benefits only if it is well implemented using enough financial and human resources. Kippra wants the Energy Bill 2004 passed before the end of this year, and urges the Government to implement new provisions on households and transport in the energy policy paper to protect health and the environment. "Effective implementation of these provisions under the modest assumptions made would lead to the reduction of carbon dioxide emission, the conservation of 76,000 hectares of woodlands, mainly in the marginal areas of Kenya and 8.1 million tons of woody biomass standing on it," the document adds. However, the organisation warns that adequate regular and accurate data must be generated for improved policy formulation.   Story by JEFF OTIENO   Daily Nation Publication Date: 5/2/2006

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NATIONAL OIL curr.	69.50	70.80	61.50	49.00	69.50	70.50	60.50	49.00	70.50	71.50	61.50	50.50	70.00	71.60	60.50	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NATIONAL OIL curr.	71.80	73.80	62.00	49.70	72.50	73.50	63.00	49.50	74.00	74.50	65.00	51.50	74.50	74.60	64.00	50.10

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NATIONAL OIL curr.	71.80	73.80	62.00	49.70	72.50	73.50	63.00	49.50	74.00	74.50	65.00	51.50	74.50	74.60	64.00	50.10

* Prices exclusive of transport
* Prices in Kenya Shillings

Hon. Kiraitu Murungi, Minister for Energy and Mwendia Nyaga, Managing Director unveils the Service Charter

Service Charter Launch and RRI End Point Celebration                             Download PDF

KPRL development manager, David Bombo, said the facility would have storage capacity of 4,700 tonnes. The refinery has engaged Nutek Solutions to conduct an environmental impact assessment before the project is implemented.On Tuesday, Sanjay Ghandhi, an environmental expert with Nutek Solutions, conducted a consultation meeting with various stakeholders who included Changamwe residents.Other participants included representatives from oil companies, civil society, Oil Spill Aid Mutual Group and the Kenya Ports Authority.

By Philip Mwakio EA Standard July 21 2006

This article featured in the Petroleum Africa Magazine August 2006 Issue. Written by Diane Sutherland , Chief Editor.

To read the article Click here

Oil companies Chevron Corp and Malaysian's Petronas have been ordered to leave Chad over claims they have not paid taxes.

The President Idriss Deby, gave the companies which have been part of the African Country's Oil Production consortium that is led by Exxon Mobil, a deadline of just 24 hours to start making plans to leave.

In the other news - A senior official from Berlin - based watch dog Transparency International warned today that Chad's move to expel two foreign oil firms could hamper growth in the country ranked the most corrupt last year.

Libyan Leader Muammar Gaddafi has scolded his nation for over reliance on oil, foreigners and imports and told it to start manufacturing things people need. The leader was quoted as saying that Libya does not produce anything but sell only oil and consume everything. A consumer society is destined for a sorry future when oil finally runs out.

The kind of trade in which you produce nothing and import goods in exchange of oil is a catastrophe.

These economic outspokenness raises hope for non-oil sector finally being on the mend in Libya.

The indutry lobby's general manager, Mr. George Wachira said in a statement that the intended government plan as reported is apparently based on wrong facts and assumptions. There has been no proof that any cartel- like activities or monopolies exist in the oil market.

Mr. Wachira said the hghest individual market share in Kenya is about 20 percent, which hardly qualifies as a monopoly.

Daily Nation, Wednesday, August 2, 2006.

 

The results show that premium sells for Kshs. 79 and diesel at Kshs. 69 respectively while premium in CBD costs Kshs. 85 per litre, while diesel Kshs. 74 per litre.

The motorist Association of Kenya (MAK), Chairman, Mr. Peter Murima, said that the disparities in the margins showed that oil majors were making a kill. Murima asked the acting Minister for Energy Mr. Henry Obwocha to consider sourcing for cheaper markets, notably crude oil from Nigeria.

The Standard - August 9, 2006.

 

All economic sectors notably transport, agriculture, manufacturing and the service sector have been forced to employ deep cost cutting measures to downsize their workforce and cut back on operationds as a way to remain afloat.

But the emergence of bio diesel research project gives the country a glimpse of hope to become self reliant in diesel production. The change of fortune follows the discovery of a plant grown in Kenya named Jatropha Curcas, whose seed has the potential to produce bio diesel. The seeds have oil content of 37 per cent, which can either be combusted to produce fuel or used as walnut candles without being refined. 

Jatropha oil, could meet cooking and lighting needs for the rural population, used to fuel boilers for industrial purposes or can be viable substitute for diesel. Research finding indicate that Jatropha oil burns twice as slowly as paraffin and a litre would cost Kshs. 30 compared to paraffin, which retails at Kshs. 60 and diesel Kshs. 74.89.

Bio diesel has low sulphur content and once combusted, it does not pollute the environment. Research further reveals that three kilogrammes of jatropha seeds have an ability to produce up to one litre of oil, which can be priced at Kshs. 15.

Jatropha normally does well in dry and humid regions and is drought resistant.

The Financial Standard, Tuesday, August 22, 2006.

Organization of the Petroleum Exporting Countries (OPEC) ministers were yesterday consulting over oil's sharp drop to just over US $ 61 a barrel from its mid-July peak of $78.40.

OPEC, which pumps a third of the World's oil, said on Tuesday that lower oil prices could harm investment in the industry. OPEC President Edmund Daukoru said "something must be done to the steady market " and the group was already talking internally about the price drop.

The bulging fuel stocks, easing US economic growth and diminishing political tensions over Iran's nuclear stand-off have sent oil prices diving about 20 per cent from July's peak of $78.4 a barrel, their steepest drop since the Gulf War in 1991.

OPEC comments however, have not triggered a spike in prices because many in the market expect the group to cut supplies only when US crude falls below $ 60.

Kenya Times - September 28, 2006.

Chief Executives of oil firms have been summoned by the government today to explain why pump prices have not been reduced despite declining international cost of crude oil.

A spot-check by the Nation at Petrol stations in Nairobi showed that prices remained unchanged ahead of today's meeting.

However, Shell and BP have effected a price reduction of Kshs. 1 for a litre of oil products across the country.  The firm's External Affairs Manager Mr. Ngaari Mwaura, said furter price reductions would be made if decline in international crude oil continues.

The Kenya Independent Petroleum Dealers Association (KIPEDA) Chairman, Keith Ngaruchi said National Oil Corporation of Kenya (NOCK) should be strengthened to enable it compete effectively with multinationals.

Meanwhile, oil in New York has fallen from its July peak because of rising US fuel stocks, easing economic growth and diminishing tension over Iran's nuclear stand-off, the steepest drop since 1991 Gulf  War. Oil held near a seven-session high above $63 a barrel today, supported by investment fund buying and speculation that OPEC could trim output to bolster prices. 

Libya has qualified 47 companies to compete for acreage in its third oil and gas licencing round since the lifting of sanctions, state-owned National Oil Corporation said. NOC, in a statement on its website (www.noclibya.com.ly), said 70 applications had been received from oil companies worldwide interested in possible exploration and production sharing agreements.

Libya wants to attract foreign investment to help it increase its oil output capacity to more than 3.0 million barrels (bpd) per day by 2010/12 from about 1.6 million bpd at present. Libya's latest oil offering, the third since the lifting of US sanctions in 2004, lists 12 offshore blocks and 29 onshore areas.

By Anthony Omuya

National Oil Corporation of Kenya's role in stabilising prices has come under scrutiny as high fuel costs threaten to slow down economic growth. Key players in transport, agriculture, manufacturing and services sectors say they have been forced to downsize workforce and cut back on operations to remain afloat.

According to Kenya Independent Petroleum Dealers Association (KIPEDA), NOCK should be strengthened to start importing crude oil and compete with multinationals. "NOCK should be given money by Government to enable the firm discharge its duties as a market stabiliser by selling oil products at an affordable price to petroleum dealers and consumers," said KIPEDA Chairman Keith Ngaruchi.

He said multinationals are making wind-fall profits, as the costs of petrol, diesel and kerosene at depots have not reduced in line with international market trends. The cost of crude, which hit a high of $78 in July, began to decline towards the end of september to $60 per barrel.

NOCK recently invited bids for a structured finance facility of $50 million to enable it to import crude oil under the Open Tender System (OTS). According to the letter of invitation, the parastatal has not participated in the OTS because of lack of finances. Meanwhile, the Kenya National Chamber of Commerce and Industry (KNCCI) says the prevailing high prices in fuel had made the country an expensive investment destination.

By Kennedy Senelwa.

Cooking gas marketers are estimating the cost of complying with new gas cylinder standards could reach Ksh. 500 million. The consumer, whose convenience the new changes seek to fulfill, would eventually pick the tab.

This radical move would in addition erode brand value of gas cylinders and pressure down retail prices. One obvious benefit for this move is that towns-people would no longer need to worry whether their neighbourhood has a filling station of their brand or not.

The Petroleum (Amendment) Rules 2006 states that "All LPG cylinders existing immediately before the provisions of the rule takes effect shall be fitted with unified values." These standards are drawn from a 2004 Kenya Bureau of Standards stipulation.

Due to this, non-compliant cylinders have four years to conform and install standardized valves and regulators. At thelapse of the deadline, gas cylinders would come in one, three, six and thirteen kilogrammes.

An LPG Cylinder Exchange Pool will be set up complete with a secretariat, for the purpose of swapping containers. At the exchange pool, which the players are formulating, all must accept and exchange cylinders. The pool is expected to formulate safety standards, competition rules, dispute resolution, fix exchange rates for cylinders (set annually), and penalties for offences.

With this new arrangement, it will be illegal to fill cylinders owned by others and a fine of Sh 15,000 per cylinder has been proposed, and while hoarding a competitor's cylinder may attract Shs. 7,000 per unit.

 

 

Oil marketing companies want the Government to conduct a feasibility study to facilitate smooth introduction of biofuels in Kenya. Petroleum Institute of East Africa (PIEA) says it has to cover issues such as taxation, regulation, transport and blending with fossil fuel.

Biofuels comprise bio-diesel, which is a blend of a vegetable oil and mineral diesel from crude oil. Bio-ethanol (gasohol) is a blend of alcohol made from cane sugar and mineral gasoline from crude oil.

PIEA General Manager George Wachira said introduction of biofuels has to be driven by economic viability and cost savings against competing alternatives. "The Government has to engage stakeholders to establish viability of local production with final unit cost of production, collection, transport and blending with fossil fuel oil," he said.

Energy sector stakeholders argue that ther is huge potential for biodiesel and bio-ethanol but Kenya lacks the institutional and regulatory framework as well as tax incentives to stimulate prduction.

Brazil has an economically viable ethanol industry, which is predicated on sugar production cost of US $145 per tonne, lower compared to Kenya's costs of US $200 to US$ 250 per tonne. " The comparable break even price for Brazil ethanol was between US$ 35 to US $ 50 per imported crude oil. For Kenya with much higher sugar production costs the crude oil break even equivalent is estimated at over US$ 65 per barrel," said Mr Wachira.

He said if biofuels will be taxable, then the Government has to develop a mechanism for licencing producers, monitoring production and distribution so that taxes are easily and fully accounted for. "If this is not effectively done then Government revenue will be lost. Differential product pricing will result in a chaotic market scenario, with the usual accompanying malpractices," he said.

By Kennedy Senelwa 

The pressure on Kenya's oil marketer's to reduce oil prices in correlation to the world prices is beginning to tell. Recently, Kenya's oil prices have been at an all time high and due to the free market principles embraced in the Kenyan oil industry many players have adopted tokenism.

It has been noted that multinationals that control this market proceed with dispatch to uniformly increase their prices whenever there is a spike in the ever-volatile global petroleum market. Consequently, consumers and Government officials alike are hoping that the same speed would be used whenever the prices fall.

The National Oil Corporation of Kenya (NOCK),  which was primarily formed for this kind of role, that is, to stabilize and moderate oil prices, has been called to be strengthened such that it may start importing crude oil and compete with multinationals. With the intention that it gains a firm discharge of its duties as a market stabilizer by selling oil products at an affordable price to petroleum dealers and consumers.

Oil is the fuel on which any economy runs. The State must never leave its pricing to the caprice of profiteers.

Oil jumped a dollar to above $60 after OPEC officials said the producer group would cut output by 1 million barrels per day as soon as possible to prop up prices. Due to this, US crude rose 90 cents to $60.31 a barrel and top world exporter, Saudi Arabia will lower production by 30,000 barrels per day as part of the plan.

Upcoming Fourth East Africa Petroleum Conference.11th-13th March 2009

Civil society organizations have warned of mass action if the Government does not compel oil companies to reduce fuel prices. The group also issued a 24-hour ultimatum that expires today, to the oil dealers to reduce pump prices or face a boycott of their products.

This comes in the midst of renewed calls by the Minister of Energy, Mr. Henry Obwocha, Permanent Secretary, Ministry of Energy Mr. Patrick Nyoike, Minister of Finance, Mr. Amos Kimunya and other society leaders for oil companies to reduce their pump prices to reflect the drop of between 20 and 25 per cent on the international market. Their calls come amid reports that oil companies are gaining an extra Ksh 42 million a day because they have maintained high prices despite the drop crude oil prices.

But the civil society groups told the Government to stop issuing empty threats and instead compel the oil companies to cut their prices to stem "this criminal and blunt exploitation." They said high cost fuel was punitive to the poor who use kerosene and public service transport.

Oil-hungry China is now the single most destabilising influence on fuel prices. This was illustrated today as news seeped out that the world’s fastest growing economy had began filling its tanks, confirming that a long anticipated stock build was underway in the Asian giant.

China had pumped at least one million barrels of Russian crude into the new strategic reserves. The news is expected to rattle global markets, coming as it did soon after OPEC began working out details of an expected one million barrels per day (bpd) production cut, which gains checked by lack of Saudi supply curbs to Asian refiners.

News of the planned cuts has already lifted prices, with US crude up 57 cents at $60.53 a barrel.

The Beijing Times reported that a million barrels of Russian crude were injected into the tanks starting August 1l. Separately two China-based port sources told Reuters that two cargoes totalling three million barrels of Russian crude had been pumped in into the Zhenhai National Strategic Petroleum Reserve Base in eastern Zhejiang province, which can hold about 33 million barrels.

News of the specific cargoes is the first firm indication that Beijing has begun building up emergency stocks, a move that traders say may put additional strain on global markets that have struggled to keep up with China ’s expanding demand in past years.

An official with number-three oil firms CNOOC told Reuters last week that it had been diverting a share of its production from offshore foreign joint venture oilfields to the reserves since the beginning of this year, but did not say how much.

 

 

 

 

 

 

Mr. Mwendia Nyaga

The Chairman of the Board of National Oil Corporation is delighted to announce the appointment of Mr Mwendia Nyaga as the new Managing Director of the corporation.

Mr. Nyaga previously held the position of Ag Managing director following the departure of Mary M’Mukindia in April this year.

An accountant by profession, Mwendia Nyaga has over 15years experience in financial management. Moving up the ranks in various organizations, Mwendia now currently seats at the helm of the National Oil Corporation of Kenya.

A graduate of the University of Nairobi (UON), Mwendia is a Certified Public Accountant of Kenya (CPA-K) and a member of the National Fossil Fuels Advisory Committee (NFFAC) and he is tasked to advice the Kenya Government on Fiscal matters.

An expert on fiscal petroleum models in Kenya, Mwendia sits in the National Negotiation Team for Upstream Contracts, and has an Oil and Gas Mini- MBA from CWC associates

Having been trained by Daniel Johnston & Van Meuers Corporation of Dr. Pedro Van Meuers, Mwendia has been severally involved in the negotiations, as the custodian of Kenya’s cash flow model, for Production Sharing Contract fiscal terms.

Prior to his appointment as Managing Director, Mwendia was in an acting position for six months and prior to this held the position of Head of Finance of National Oil Corporation of Kenya, a position he held for three years, playing a key role not only in finance but also in stakeholder exploration sensitization.

His technical and academic experience is complemented by his excellent people skills, good humor, and embracement of professionalism in all its forms. This has enabled him to make good friends, and steer teams into achieving and realizing their individual and corporate objectives.

Addressing staff at the corporations head office, the chairman lauded the achievements of Mwendia Nyaga in his position of finance manager and later as Ag. Managing Director, “Under Mwendia’s leadership for the past few months National Oil Corporation has gone from strength to strength. The company’s results have significantly improved and many major projects have been completed, including growth and expansion and various RRI projects that have seen the company move to the next level.”

Mr Nyaga takes up the leadership post with immediate effect.

 

 

 

Lundin Petroleum joins the hunt for oil in Kenya

 

Mr. Patrick Nyoike

 

Written by Jim Onyango

October 08 2007: International oil and gas companies have kicked off a scramble for Kenya ’s onshore blocks. Geneva-based Swedish oil explorer Lundin Petroleum, entering the Kenyan oil exploration scene for the first time, has agreed to sign a revenue sharing contract with the Ministry of Energy— opening a new chapter in the way the country manages its search for oil. Ashley Heppenstall, the president of Lundin Petroleum, said the company is ready to share proceeds of its mining activities in Kenya should it strike oil or gas. Lundin has been awarded an exploration licence for the Anza basin Block 10a, which spans over a 14,000 square kilometre area. “We want to take the risk because we believe it is worth it. Eventually oil will be discovered in Kenya . East Africa is a fertile area for oil and natural gas,” said Mr Heppenstall. The move comes amid a recent decision by the Government to control a bigger share of mining proceeds if oil is found. Under the new arrangement, the government will sign production sharing contracts before any work, including seismic surveys begin on the four offshore blocks that are being eyed by at least six international oil companies.  The production sharing contracts are aimed at ensuring that the country maximises any benefits that may accrue from such ventures. Previously, the government leased out the exploration blocks to the oil companies to prospect. Such contracts gave the prospectors full rights to produce, and sell offering them full control over any mineral that may be found within such blocks. Under the new contracts however, Kenya will own the oil while the international explorers invest in prospecting and production of the oil with the two parties sharing the proceeds according to an agreed formula. China National Offshore Oil Corporation (CNOOC) which had bagged four of Kenya ’s 11 exploration blocks, gave up the Anza basin which was taken up by Lundin Petroleum. The petroleum firm intends to spend about $15 million to shoot its own seismic data on the Anza block 10a in the next one year. The company said if the data revealed any oil deposits it will sink a well at a cost of $10 million in the next three years. The seismic data, a result of geophysical survey, informs explorers of the potential holding blocks for crude oil and gas. The data also indicates the reserve capacity of blocks. In a recent interview with the Business Daily, Energy permanent secretary Patrick Nyoike said the ministry will shoot her own seismic data and sell it to prospective oil explorers. “Next year we want to review the situation and dedicate resources in the budget to map data and sell to companies interested in exploring for oil in Kenya ,”  Mr Nyoike said. Kenya ’s other alterative is to “hitchhike” or co-fund the data mapping by international oil explorers which are already carrying out their survey. This would be a cheaper deal since the country will pay a fraction of the cost of the survey and still co-own the survey. Kenya has set aside 11 blocks for oil exploration activities some at the Coast while others in the Northern corridor. In April 2006, the government gave the Chinese government owned CNOOC exclusive rights over a total of six out of 11 available blocks, including the hotly contested Blocks 9 and 10a in the Mandera area. But the Chinese company has since handed back the Block 10a. The Chinese company also controls blocks covering more than 100,000 square kilometres in Indian Ocean . Two international oil and gas exploration firms say they have acquired new data that reveal a reserve potential of 1.1 billion barrels of oil in Lamu. Australia based Gippsland Offshore Petroleum and its partner Pancontinental Oil & Gas say they have completed geophysical survey of a 6,300 line kilometres of Lamu basin by air and gathered enough data to be processed in Melbourne . The data will be integrated into the recently acquired seismic data with the mapping or study of the drillable sites set to commence August next year. On the Kenya-Sudan border, UK oil company CAMEC International is negotiating for Loktikipi basin Block 11. Spanish oil giant Cepsa had expressed interest in the Anza basin Block 10a two years ago when CNOOC was awarded exploration rights for the northern frontier block.

The Government has taken the first steps towards regulating the oil industry by proposing the formation of a commission to manage the energy sector.

The proposal to set up the Energy Regulatory Commission comes in the wake of an outcry over high petrol prices and what consumers complained about that marketers had adopted what appeared to be cartel-like tendencies and price fixing.

The proposed Commission, which will replace the Electricity Regulatory Board, has its mandate widened to include regulating the petroleum industry, electricity and renewable sources of energy. Among other duties the commission will regulate importation, exportation, generation, transmission, distribution, supply and use of electricity.

The proposals are contained in the Energy Bill (2006), which will be debated in Parliament. Currently, the Ministry of Energy licenses marketers in petroleum products while regulation is done through a voluntary industry lobby, the Petroleum Institute of East Africa .

Fines of up to 2 million or two years imprisonment or both have been proposed for those contravening laws on regulating the oil industry. Players who breach the terms will have their licenses and permits revoked.

Besides issuing licenses to marketers in the energy sector, the commission will also have powers to enforce and review regulations, codes and standards and fight adulterations of petroleum products.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To read the article Click Here

After seven years in Kenya Exxon Mobil Corporation, which owns Mobil Kenya , has finally bailed out by selling out its retail outlets to Tamoil African Holdings. Tamoil Africa is a subsidiary of Libya ’s European oil company, Tamoil Group, managed by Oilinvest of Netherlands. The local brand will trade under the name Tamoil East Africa.

The Tamoil buyout, finalized in October 9, will also see the multinational sell its holdings in Cameroon, Cote d’Ivoire, Gabon, Senegal and Reunion Islands . Exxon will have sold all its interests in retail business in all the six countries which will see the American multinational down-scale its operations in Africa to only four countries – Egypt, Morocco, Nigeria and Tunisia .

According to the Tamoil East Africa acting Managing Director Godfrey Mugambi, Tamoil is using the acquisition to expand its operations in Africa and as an entry into East Africa .

According to the deal documents, the transaction was concluded as a sale of shares, where only the ownership of the company will change. As such the retail businesses are expected to trade to continue operating without major changes but for the brand name. All contractual and commercial terms of the company, as well as existing employment contracts will remain the valid.

However, the transfer of ownership depends on the approval of the relevant regulatory bodies in the two countries. In Kenya the deal has to be Okayed by the commissioner of monopolies and prices through the minister of Finance.

By exiting Kenya , Exxon Mobil joins a growing list of multinationals that have quit the country citing a hostile business environment. The multinationals have always hit at independent operators saying they are not required to import their oil through the Kenya Oil Refineries Ltd. This they say makes it possible for the independents to evade taxes, making their oil cheaper.

Last year BP exited from Kenya and sold off its assets to its partner, Shell Petroleum Company, a subsidiary of Royal Dutch, but the Government has embargoed the deal saying the acquisition would result in a monopoly. The matter is before the monopolies and prices tribunal.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It is not exactly the best time to be a Big Oil executive in Kenya. All of a sudden, the whole country is hankering to tell you how to do your job. Calculators are out and , bandying all manner of permutations, everybody seems to have an opinion of how you should price your precious stock-in-trade. From the loud-mouthed tout on Route 44 or 58 to the more sophisticated lot operating under the umbrella of one of the latest additions to our crowded gallery of single-issue lobbyists: the Kenya Motorists Association.  

Memo is yet to become a KMA corporate member, but it is keen on sending emissaries to get an idea of their potential for generating real results. A hack once wrote that whenever the global oil business sneezes, Kenya catches a cold. It is replicated with a regularity that is almost boring. The so-called Adnoc prices reaches for the skies and almost immediately, even before the next import consignment reaches Mombasa, the changes are reflected on the forecourrt price displays. Orchestration is the word. The reverse happens and you get all manner of collective sophistry and outright lethargy from our oil merchants.

True, Energy PS Patrick Nyoike has a decidedly crowded in-tray, but he has found time to rail at this practise. But it recently took the intervention of President Kibaki for the oil men to take notice.

Intriguingly, there was scant recourse to science as a few shillings were knocked off, ever so relunctantly.

It is at such moments that Memo longs for one Crispus Mutitu. During his long stint at Energy, the shrill, indefatigable PS was the embodiment of a one-man buffer against Big Oil. He had the tenacity of bull terrier.
He could be persitent in an irritating way. And he stayed on the messsage. No need for regulation, KMA or even intervention from the hill.

If ever Kimunya's pro-regulation talk ever materializes, we will be rooting for the return of Mutitu. Precedent is on our side.
 

Vienna ( Austria ) Wednesday

Crude futures edged higher today as OPEC’s decision last week to cut output appeared to be taking hold, though gains were limited ahead of weekly US supply data expected to show an increase in the country’s inventories.

Light sweet crude for December delivery gained 9 cents to US$ 59.44 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange.

December Brent at London’s ICE Futures exchange rose 23 cents to US $ 60.09 a barrel.

Dow Jones Newswires, citing an industry source, reported that the United Arab Emirates is to cut November oil supplies by around five percent, in line with the organization of exporting Countries’ pledge to lower output by a total of 1.2 million barrels a day, an industry source said today.

The UAE is the second Opec member to cut its supply, Dow Jones said, after a senior Opec delegate said Monday that Saudi Arabia informed all its global oil customers that they will receive less oil in November.

Crude futures had fallen amid doubts about Opec's ability to implement the decision to cut daily production. But some traders believe the cartel’s intentions could nevertheless help to support prices around US$ 60 a barrel.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Yesterday, Energy Minister Hon. Henry Obwocha issued a statement saying pump prices should come down by Sh 6.20 a litre of petrol, diesel and kerosene to between Sh 72.29 and Sh 74.79, Sh 62.29 and Sh 66.29 and Sh 54.29 and Sh 48.80 respectively.

Though crude prices have fallen from $79 a barrel two months ago to below $60 a barrel, only a Sh 3 reduction has been effected by oil companies.

The companies argued that they would pass the benefits to consumers after selling the consignment they had bought at high prices.

But as the two disagree, it is the consumers that have suffered the brunt of high prices. Due to this, a united voice calls for the Energy Bill published last month to be taken to Parliament, debated and enacted into law. This Bill proposes an Energy Regulatory Commission, whose work would be to deal with many issues in the oil business, including prices and tariffs. It would be similar to the Electricity Regulatory Board, ERB, which determines what Kenya Power and Lighting Company charges. “This is the recommended path the Energy sector should walk,” experts said.

 

 

 

 

Interest rises in East African oil prospects                 To read article Click here

 

 

 

 

 

 

 

 

 

 

 

 

US Ambassador Mr. Micheal Ranneberger (centre), the National Oil Corporation of Kenya Managing Director Mrs. Mary Kimotho M'Mukindia and Board Chairman Mr. Peter Munga (left) when the envoy paid a courtesy call yesterday.

The Energy Bill was drafted with the involvement of  all key stakeholders . PIEA, Caltex, Shell, KPC and NOCK  represented the petroleum sector while ERB,  Kengen and KPLC represented the electricity sector.

The Bill seeks to merge the  regulation of all energy sectors under Energy Regulatory Commission (ERC ) leaving the Minister  to handle policy issues.  It is intended that the ERC shall take the already existing ERB structures and capacity and add on the petroleum section. The ERC will be chaired by a non-executive chairman appointed by the president.  Two commissioners shall be from the private sector, while the workers, employers, manufacturers will each have a commissioner. Commissioners (including the Chairman) must be graduates with no less than 15 years experience in engineering, law,  finance, economics or energy. 

It is expected that a petroleum sales levy similar to the electricity levy already in existence will be raised to fund the operations of ERC.

The management will be headed by a Director General meeting the same qualifications and experience as the commissioners.  Director of Electricity and Director of Petroleum will specifically head the two key sectors and will  meet the same qualifications and experience criteria as commissioners and  Director General

Some of the functions of the ERC are the following

·          Issuing licenses and permits  in the energy sector

·          Advise Minister on policy  formulation

·          Monitor  and implement  observance and principles  of fair competition in energy sector

·          National  energy conservation  programme

·          Disaster preparedness in the energy sector

·          Environment , Health and Safety Standards  in the energy sector

·          Formulate regulations , codes and standards in energy sector 

The ERC shall have powers to enforce compliance; to investigate;  to determine complaints and to  impose penalties on persons in default.

There shall however be constituted an Energy Tribunal  appointed by the Minister with the jurisdiction (equal to High Court)  to hear and determine all matters referred to it, related to energy sector.

There is a specific and detailed section on Petroleum  regulation. The  Bill gives the ERC powers to make regulations in  all areas of petroleum sector . The following areas are  specifically detailed in the  Bill:

·          Modalities for business licensing
·          Construction permits
·          Specific  requirements for road  transportation licenses and permits 
·          Standards of petroleum products , equipment , facilities and installations
·          Minimum operational stocks
·          Provision of strategic stocks
·          Environment  Health and Safety Standards 

When the Bill is enacted the Petroleum Act and Electric Power Act shall be repealed

 

 

 

 

 

The Energy Bill is a good  regulatory law  that gives structures and capacity for effective regulation and enforcement  for the energy sector and should  be supported ( PIEA ).

 

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK Currnt.	69.10	69.90	59.50	48.00	68.90	69.90	60.90	48.80	70.80	71.50	60.50	49.00	70.80	71.50	60.50	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK Currnt.	69.10	69.90	59.50	48.00	68.90	69.90	60.90	48.80	70.80	71.50	60.50	49.00	70.80	71.50	60.50	48.50
NOCK Prop.	69.00	69.00	58.70	46.70	68.80	-	68.80	47.70	69.90	70.80	59.00	48.90	69.80	70.80	58.20	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	69.00	69.00	59.20	46.70	68.80	69.90	59.00	47.70	69.90	70.80	59.00	48.90	70.80	70.80	59.00	48.00

* Prices exclusive of transport
* Prices in Kenya Shillings

Woodside Energy, the company that is searching for oil and gas in Lamu will spend Sh8 billion to conduct exploration in just 90 days.

Drilling is supposed to take place within the Pomboo area (Block L-5), where a well will be drilled 80 km from the Kenyan coast and the East of Kiunga Marine National Reserve and Sokwe area (Block L-7). Both blocks have reservoirs on rocks of cretaceous and tertiary age, which elsewhere contain a large proportion of the world’s known oil and gas reserves.

Equipment such as: helicopters and drilling ship (Mv Chikyu) have arrived and have started drilling in an exercise that is expected to provide Kenya with a status report on whether it has sufficient oil.

The British - Australian consortium, comprising of Australia’s Woodside Energy and Global Petroleum and Britain’s Dana Petroleum, had identified 50 sites with good prospects, a number of which were capable of holding millions barrels of oil.

The results of whether Kenya has oil and fuel will be known to Kenyans in the next three months after the exploration is completed.

There has been growing interest in Kenya oil exploration as is evident as various multi-nationals have done studies since 1950’s.

Australian company Woodside’s search for oil in Kenya started in 2003 when they carried out a seismic survey to find out what lay below the sea-bed.

Norwegian companies have been searching for the commodity along the Kenyan coast since 2002, with the latest search completed in January by Mv Polar Duke.

Even though exploration activities have sent a wave of optimism across the country, the firm says that the event that oil and fuel are found, it will take another seven years before the actual production can start.

 

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	69.00	69.00	59.20	46.70	68.80	69.90	59.00	47.70	69.90	70.80	59.00	48.90	70.80	70.80	59.00	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

 

 

 

 

 

 

 

 

 

On 8^th December 2006 the government announced the performance evaluation results for ministries and parastatals. Out of 116 parastatals, National Oil Corporation of Kenya was awarded the third place trophy, coming in after Kenya Seed Company and Kenya Pipeline Company.

This is a grand yet humbling achievement, reflective of the hard work and dedication of the entire team. We congratulate all NOCK employees for achieving excellent results.

Collecting the award on behalf of the Chairman Peter K. Munga who was away on business in London, was the Managing Director Mrs. Mary Kimotho M’Mukindia.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Like many Kenyans, Woodside Energy is pleased to have finally begun drilling for oil and gas after three years of preparation.

We are hopeful that our drilling programme, which started on December 2, about 80km from the northern Kenya coast in more than 2,000 metres of water, will succeed. While our expectations are high, we constantly remind ourselves to put the expectations in perspective for success is not guaranteed.

Oil and gas exploration is high risk. We estimate that our first well in Kenya , Pomboo-1, has 12 per cent chance of success. Many people are convinced that we have found oil. This is not the case. We have not yet found oil.

We have done as much work as we can to give ourselves the best chance of success. We have studied existing geological data; we have acquired new seismic information to get a clearer picture of what the earth’s layers might look like and we have applied our extensive geo-scientific skills to pinpoint prospects, which may contain oil or gas.

But we cannot physically see through two kilometers of water and three to five of rock. We have to drill to see if our theories and scientific estimations are correct.

Over the past 18 months, we have briefed about 250 Government, non-government, and community and industry organizations about the environment. Before we started drilling, we submitted a comprehensive project plan (Draft EIA) to the Government. This formed the basis on which the National Environment Management Authority issued us a license to drill two exploration wells. International experts, who are registered in Kenya , completed the project plan.

As a company, we have an impeccable environmental management record in our more than 50 years of operation. We are applying industry-best standards and we believe the risk of environmental impact is low.

Many people have also expressed concern about the relatively few jobs we have created and the distribution of oil and gas revenues should exploration succeed.

The exploration phase of a project creates very few jobs. However, we have employed many Kenyans in logistics, supply, finance, office management and administration and should we find oil, we will provide training and more jobs.

Two things are important about the distribution of oil and gas revenues. One, Woodside has no role in the distribution of revenues. That is for the people’s elected representatives to do and decide.

However, we have encouraged the Government to embrace the Extractive Industries Transparency Initiative, which is aimed at public disclosure of oil and gas revenues that companies pay governments. Our company is a signatory to this initiative. In this way, people know at least how much money the Government gets from the ventures.

The second important issue is about the long-term nature of oil and gas exploration and production. If there were a discovery which is worth developing, it would take a lot more work and number of years before any production is possible. Development work and project construction can involve billions of shillings.

It has already taken Woodside three years to get to the point of drilling. Even if we discover oil over the next couple of months, we still have much work to do to determine whether the find can be commercially extracted.

Success could, in the long term, transform the Kenyan economy and the lives of Kenyans for the better.

But an oil discovery is far from assured. If we are successful, it will impose on Kenya an onerous responsibility to manage the wealth wisely, fairly and equitably.

 

 

 

 

 

 

 

 

 

 

The official launch of National Oil's website www.nockenya.co.ke on 9th December was a culmination of positive changes the company has undergone since the new management was appointed in April 2003. In his keynote address, the Chairman, Gen (rtd) Mahmoud Mohamed highlighted the corporation's turn around from losses of 1.5 billion before June 2003 to a combined profit of over Ksh. 70 million as at 30^th June 2005. This was a result of hard work put in by the new management. A 3-year corporate plan has been developed, which among other things will lay emphasis on growing business through development of key retail outlets in strategic locations especially in Nairobi and other major towns, as well as increased oil exploration activities.
 
In tandem with its vision that National Oil Corporation "be the leading integrated National Oil Company in the region," the website launch would be a suitable avenue to highlight its core activities especially in upstream operations.

This interactive website strives to educate and inform the public on various activities the company is engaged in in an effort to fulfill its mission, which is, "to explore, produce and trade in petroleum products in a commercial and socially responsible manner for the benefit of all stakeholders; cognizant of its mandate as the national data bank and as an advisor to the government on petroleum matters."

By clicking on www.nockenya.co.ke you are exposing yourself to a wealth of information on current and past upstream activities in Kenya's oil  and gas exploration, downstream activities and other information designed to inform and educate you. Find out about our careers, tenders, marketing news and our retail and branch networks at a click of a button.

Welcome to the NOCK website.

 

 

 

 

 

 

 

 

On Jamhuri Day, 12th December 2006 National Oil Corporation of Kenya Managing Director Mrs. Mary Kimotho M'Mukindia was recognized by His Excellency the President Mwai Kibaki during the national celebrations for her outstanding and distinguished service rendered to the nation. She was conferred The Order of the Moran of the Burning Spear.

This comes in the wake of NOCK having been awarded 3rd position in the National Performance Contract results.

It is with admiration and pride that we at NOCK congratulate her on her outstanding accomplishment.

Well done Mary!

 

	NAIROBI AREA				NAKURU AREA				ELDORET AREA				KISUMU AREA
CO.	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK	PMS	RMS	AGO	IK
NOCK curr.	69.00	69.00	59.20	47.50	68.80	69.90	59.00	47.70	69.90	70.80	59.00	48.90	70.80	70.80	59.00	48.50

* Prices exclusive of transport
* Prices in Kenya Shillings

 

TOP individual awards at Global Pacific & Partners annual Africa Oil Week conference and exhibition in Cape Town went to National Oil Company of Kenya (NOCK) Managing Director Mary Kimotho M'Mukindia and the boss of Senegal's state oil company Petrosen, Serigne Mboup, write Barry Morgan and Iain Esau.
While Mboup received a pewter elephant for his strategic thinking and putting Senegal firmly on the oilman's itinerary, M'Mukindia was awarded the "Lion" for her "high-profile performance" in leasing Kenya's acreage and for earning the unreserved respect of the oil industry.

Meanwhile, Gordon Sneddon, FMC's key man in Angola, picked up the African service company of the year award.

Oil climbed more than a dollar on Monday after a refinery fire in Italy added to fears Iran's defiant pursuit of its nuclear programme and violence in Nigeria will lead to a global fuel shortage. IPE Brent crude futures stood 66 cents higher at $72.68. Earlier they had risen more than a dollar to a session high of $73.05. US light, sweet crude jumped 59 cents to $72.47 a barrel, off a session peak of $72.85.   Thin volumes Prices were driven higher after a weekend fire that shut ERG group's 160,000 barrel per day (bpd) Impianti Nord refinery in Sicily renewed concerns about inadequate refining capacity. "It's all to do with the refinery in Sicily," said Rob Laughlin of brokers Man Financial in London. But he added that thin volume because of a public holiday in Europe and much of Asia was exaggerating price moves. Concern about years of under-investment in the refining sector, together with worries about disruption of unrefined crude, especially in Iran and Nigeria, has generated a sustained rally in oil prices. US crude hit a record of $75.35 before easing last week, partly because of US President George W. Bush's decision to ease fuel standards temporarily to increase availability of refined products. But concerns overall crude supplies could run short because of the tension in major oil producing countries prevented a deeper sell-off. "Supply side factors continue to be the wild card for further price advances, but if these fail to materialise, we believe oil prices will fall back towards the $65 a barrel level," Deutsche Bank wrote in a research note. "We believe that another shock could take prices up over $100 a barrel," it warned, but said prices were unlikely to be sustained at this level. Iran, which the world's nuclear watchdog said last week had ignored international calls to abandon its atomic programme, vowed on Sunday to carry on pursuing a nuclear fuel cycle and to strike back if it is attacked. UN ambassadors from the United States, Britain and France are expected to introduce this week a Security Council resolution to oblige Iran legally to comply with demands to halt enrichment. Failure to do so could result in limited sanctions, although Russia and China —the other two veto-wielding council members — say they do not favour such a move for now.  Daily Nation Publication Date: 5/2/2006

The US inventories of gasoline rose by 1.5million barrels and crude stocks climbed 0.2 million barrels. The market is in an extremely nervous state right now. The slightest thing will be able to lift prices Opec President Edmund Daukoru said on Wednesday that current prices level posed a threat to the World Economy and a price in the mid-60-dollar range would be more acceptable.

The Standard Newspaper / Friday / 21 July 2006