Govt seeks independent audit of crude oil reserves

The Ministry of Energy and Petroleum has issued a fresh bid for consultancy services to audit the country’s crude oil reserves.

This comes as the government together with oil explorer Tullow makes steps towards making a final investment decision on the commercial viability of the country’s crude oil.

The independent audit is expected to ascertain the exact crude oil reserves held in two oil blocks in Turkana County.

The audit will cover exploration works between 2012 and 2017.

British explorer Tullow estimates that the country has 750 million barrels of crude oil with the firm making further discoveries in new oil blocks.

A final investment decision will inform the possibility of beginning commercial oil exports or whether to abandon processing the process all together.

The Ministry of Energy and Petroleum also plans to use the findings from the independent audit to support its capital raising plans in its quest to buy back in rights to the two oil blocks.

“This will support the government of Kenya not only in the decision making about possible investment in the development of oil discoveries but also raise equity funds by the dual listing of the Kenyan state participating firm,” the ministry said in a notice in the dailies.

The rights allow the government and ordinary investors to own part of the oil-producing blocks once they are certified to hold reserves, protecting taxpayers from the highly risky initial exploration stage.

The ministry has already announced plans to dual list the National Oil Corporation locally and on the London Stock Exchange (LSE) in a move that could generate Sh100 billion.

The listing on the LSE will allow the government raise funds through bonds in the international market.

The objective of the audit is to audit the oil reserves to develop a responsible, unbiased and independent technical view of the oil assets in block 10BB and 13T.