Decision on Vanoil Energy final: State

By GEOFFREY MOSOKU

The Government has said it will not renew an exploration licence for Canadian firm Vanoil Energy Ltd and denied reports of negotiations between the State and the oil and gas company.

Energy Cabinet Secretary Davies Chirchir and his Principal Secretary Joseph Njoroge insisted that Kenya is not willing to consider any request for extension of the licence, which expired last December.

“Our position as Government of Kenya is that the licence given to Vanoil for exploration expired even after four extensions and we don’t intend to open any negotiations on the same,” Chirchir told The Standard.

The remarks by Mr Chirchir comes at a time when there is heightened lobbying for the renewal of Vanoil’s licence.

An MP from North Eastern who has also been attempting to seek State House intervention on the matter is co-ordinating the lobbying. The Canadian firm has also threatened to institute arbitration proceedings if the ministry sticks to its position.

In a letter through London based law firm Hebert Smith Freehills dated February 14, 2014, Vanoil is demanding for an immediate consensual resolution failure to which they will move to court.

Vanoil in its latest press statement posted on the Toronto Stock Exchange claimed it is negotiating to renew its interest in onshore Blocks 3A and 3B, originally acquired in October 2007 through the signing of a Production Sharing Contract (PSC) with the Government of the Republic of Kenya.

“Vanoil Energy Ltd (“Vanoil” or the “Company”), a Vancouver-based Canadian international oil and gas development company, wishes to confirm ongoing discussions with the Kenyan Government with regard to its licence renewals in Kenya.

However, PS Njoroge refuted the reports and added; “The ministry has already begun drafting an advert for expression of interest for the Blocks 3A and 3B and we are not dealing with Vanoil anymore.”

Chirchir refused to extend the exploration licence after Vanoil Energy Limited failed to comply with the Production Sharing Contract (PSC), which it signed with the Government in October 2007.