Kenya Petroleum Technical Assistance Project (KEPTAP) is a World Bank funded initiative to assist the government of Kenya in building capacity to manage its petroleum sector and wealth for sustainable development impacts. KEPTAP has four components namely: [A] Petroleum Sector - Reforms and Capacity Building; [B] Revenue and Investment Management - Reforms and Capacity Building; [C] Sustainable Impact of Oil and Gas Industry - Reforms and [D] Capacity Building; and Project Management.
The six(6) years project, funded to the tune of USD 50 million, became effective in October 2014 and is being implemented by nineteen (19) agencies (beneficiaries) clustered under three government ministries: Energy and Petroleum (component A), National Treasury (component B) Industrialization and Enterprise Development (component C). The project beneficiaries (implementing agencies) include government entities that have roles in the exploitation of Oil and Gas resource as well as the civil society organization. The overall project coordination and management resides in the Ministry of Energy and Petroleum with a Project Management Unit (PMU) secretariat set up to manage the project on a day-to-day basis.
Key objectives of KEPTAP include strengthening Upward and Downward linkages in the oil and gas industry. It is important to formulate sound public and private sector policies to capitalize on resource development. The concept of value-addition means policies that optimize the economic value derived from development of natural resources by creating an environment in which the industry serves as a springboard for additional economic activities and facilitates a robust multiplier effect. This includes promoting value-addition activities downstream to reduce dependency on exports of primary goods, generating employment through provision of services upstream and downstream, designing local content policies, facilitating diversification away from natural resources, promoting appropriate standards and promoting the productive sector with natural resources projects.
The project supports capacity-building in the administration of revenue to be generated from the oil sector. This includes capacity building in forecasting and collection of oil revenues and taxes; verification and auditing of recoverable costs proposed by oil companies; transfer of funds as prescribed in the legislation and report on oil revenue collection. A dedicated gender assessment will be conducted to identify any potential gender-specific impacts and opportunities of the sector – including how men and women may differently experience risks and benefits of the sector. The PMU has already commenced the procurement of a consultant/firm to conduct this study whose findings will feed into a broader study: Strategic Environment and Social Assessment (SESA) whose procurement is also underway.
An effective communications strategy is required on the extractive industries sector that defines clear responsibilities for communications. A sector-specific National Communications Strategy (NCS) will empower a greater proportion of the Kenyan public to effectively access, understand and participate in the ongoing dialogue on using the petroleum deposits as a source of national wealth. Procurement of the study is in progress alongside other:
• Public Information and Awareness Campaign - Awareness on Oil & Gas (O&G) sector developments among stakeholders in Kenya is low. The objective of this study is to ensure that target groups are identified, informed, expectations aligned and that roles and responsibilities are clarified. Different target groups will require different information content, level of information complexity and communication channels to achieve the objectives.
• Institutional Review - will provide a functional diagnosis of key institutions that have responsibility in O&G resource exploitation with a focus on mandates, objectives and responsibilities, organizational management structures, processes and procedures, as well as human, technical and financial capabilities, while considering the growth of the sector. The Institutional Reviews and corresponding inter-institutional coordination mechanisms, represent a complex and highly important task for the success and sustainability of Kenya’s petroleum sector.
• Transaction Advisor (for Petroleum Agreements) – will provide support to the GoK Negotiation Team on license negotiations and other negotiations (e.g. pipelines, processing facilities, etc.) related to the development of O&G operations. Negotiation team will require a core capacity in economic modeling and negotiation skills in addition to access to specialized technical/commercial/legal expertise plus international experience to match private sector parties with whom to negotiate.
• Strategic Environment and Social Assessment (SESA) - will provide an appropriate basis for development of policies to mitigate potential social risks consistent with international good practice. The SESA will identify gaps in regulations, capacity building needs, public consultation and participation mechanisms needed.