Kenya’s oil and gas industry local content framework: an analysis of Sections 50, 51 and 52 of the Petroleum Act 2019
Odhiambo, Mildredtinnah Adongo
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Following the discovery of commercially viable oil in the North Western region of Turkana by Tullow Oil, Kenya realized that need to promote local content in its petroleum industry and as a result, the Petroleum Act 2019 was enacted into law. This study analyzes the local content framework under sections 50, 51 and 52 of the Petroleum Act 2019 to establish their efficiency and adequacy for the country’s petroleum industry. This study analyzes the various factors that challenge the successful implementation of local content within Kenya’s petroleum industry in comparison to the local content framework of both Nigeria and Brazil. The research evaluates the efficiency and adequacy of the local content provisions under the Petroleum Act with the aim of establishing whether the requirements meet international best practice legislative standards. This study compares Kenya’s local content framework to that of Nigeria and Brazil and examines that mechanism that have been put in place that to measure and monitor local content to draw lessons from which Kenya can learn and adopt within her petroleum industry in order to achieve success and positive local content outcomes within the petroleum industry. This study particularly analyses the legal and institutional local content frameworks that have promoted local content in both Brazil and Nigeria and compares them to that of Kenya to gauge the Petroleum Act 2019’s efficiency and adequacy for the country’s petroleum industry. This study finds that both Nigeria and Brazil’s local content frameworks are well structured and are specific to the needs of each of the countries and the result of this is that both countries have been able to achieve positive local content outcomes within their petroleum industries. The specificity in the local content policies and requirements has boosted local content within the petroleum industry and this study recommends that Kenya should draw lessons from the two countries in order to achieve positive local content outcomes.