Kenya's oil industry reforms

Apr 14, 1997 02:00 AM

Kenya hopes to unveil by August a multi-million-dollar plan to upgrade its oil refineries in Mombassa and to develop its oil procurement and distribution system. Energy Minister Kirugi M'Mukundia told that his east African country - a net oil importer - would also welcome greater private sector investment and regional co-operation in the programme, which he estimated would cost up to $ 500 mm in the next 5 to 10 years. But he said the government would "play a regulatory role" in the procurement, storage and distribution industry. "In principle, if we are assured of security of supply and price competitiveness, we have no problem with a big private sector role and involvement," he said. "We may differ sometimes on matters of detail, but even there we are open to negotiations to ensure there is development. We are currently working on a comprehensive plan and it should be ready by August," he said when he outlined business opportunities offered by Kenya's deregulation plans.
In a rough sketch of the programme, M'Mukundia said private investors would have a chance to participate in upgrading Kenya's oil refinery facilities at the Indian Ocean port city of Mombassa, upgrading the country's oil pipeline and in expanding business in neighbouring markets such as Uganda, Rwanda, Burundi, southern Sudan and eastern Zaire. The minister said the new development programme would be flexible enough to allow fast business decisions, as the Kenyan government had wanted to upgrade the Mombassa facilities "years and long ago," while its private sector partners had dragged their feet on the issue. Kenya, he said, would also establish a regulatory body to oversee the deregulation process and to supervise the whole oil industry. M'Mukundia said the oil procurement, refinery and distribution industry in East Africa would greatly benefit from regional co-operation and joint projects. "There is certainly room for joint investments and general co-operation," he said.

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