In This Issue

In this issue

14 24

Upstream: Government working Board of Directors Editorial, Production & Advertising closely with communities 10 Chairman - Total PLC Vice Chairman- Libya Oil Kenya Limited Galana Oil Kenya Limited Alison and Davis Group Ltd Gulf Energy Limited 6th Floor, Town House, Hass Petroleum Limited Kaunda Street TOTAL Motor Show 2018 KenolKobil Limited Tel - 020 2320083, 0721 845 944 13 Kenya Petroleum Refineries Limited Email: [email protected] Kenya Pipeline Company Hashi Energy Limited Editorial Board Vivo Energy Limited Wanjiku Manyara, Kimemia Mugo, National Oil Corporation of Kenya Kevin Adundo, Tony Ndolo Local content evolution 19 Africa Gas & Oil Co. Limited Petrocity Energy (K) Limited Contributors Gapco Kenya Limited Wanjiku Manyara, Kimemia Mugo, VTTI (K) LTD Kevin Adundo, Zoher Pirbhai, Prakriti Tosha Petroleum Raghavan, Daniel Muasya,Tony Ndolo, Fight against illicit trade 21 East AFrican Gasoil Limited Dorice Itebaluk.and Richard Nandi. Stabex International BOC Gases Kurrent TechnologiesBOC LimitedGases Engen Kenya Limited Engen KenyaSGS Limited (K) LTD Pictorial 28 Robert Paterson Varun Sharma

Petroleum Insight is published quarterly by the Petroleum Institute of East Regional news 30 Africa. Views expressed in this publication do not necessarily reflect the position of PIEA. All rights reserved.

Petroleum Institute of East Africa - Fourth Floor, Bruce House P.O. Box 8936-00200 Nairobi - Phone: 254-20-2249081,3313046, 3313047 Mobile: 0722 221120 - Fax: 254-203-313048 Market data 35 Email: [email protected] - Website: www.petroleum.co.ke

1 Insight From the General Manager

Generally, analysts foresee disruption of the aforementioned price range given the escalated deteriorating state of Venezuela, recent attacks on NOC headquarters in Libya and the decisions that countries will make with respect to US sanctions on Iran. All these factors may inform production decisions of oil producers.

The global crude oil prices scenario has trickled down to the East Africa region. In addition, the Finance Act 2018 has seen petroleum prices increase in Kenya upon introduction of Value Added Tax (VAT) and a further increase for Kerosene due to the enforcement of the anti-adulteration levy.

The Industry through PIEA had made numerous evidence- based proposals to the Government on how to effectively tame adulteration which informed the introduction of the aforementioned levy on Kerosene. This solution will seal the previous tax loophole and eliminate illicit trade in fuel along with the attendant damage on machinery and the environment. It will also lead to shutting down of illegal fuel dens that have been a big risk to security of supply.

Focus now shifts to fast tracking the implementation of the ince the second quarter this year, crude oil prices have Liqueﬁed Petroleum Gas (LPG) Country’s road map and action been swinging between US$70 to US$80 per barrel. plan that was developed by stakeholders at the May 2016 National LPG stakeholders workshop. The two documents were SAccording to the International Energy Agency (IEA), guided by the National Energy and Petroleum Policy directives the trend is attributable to the current production decline in and strategies that aim to make LPG the primary cooking fuel Venezuela and reduction in Iranian exports which are expected for Kenyan households by 2030. to decline further when US sanctions against Iran’s oil exports are implemented in the fourth quarter of the year. The policy maker needs to now sign off the new Legal Notice 121 for subsequent gazettement. The statute aims to achieve The IEA projects that markets could tighten and oil prices could the desired legal and regulatory reforms in the LPG segment rise without offsetting increased production from elsewhere if which needs to be implemented to unlock access to LPG Venezuelan and Iranian exports continue to fall. in every corner of Kenya to replace kerosene, ﬁrewood and charcoal.

There is no doubt that the LPG segment is a key item in the Country’s development agenda as it contributes signiﬁcantly The policy maker needs to manufacturing, healthcare and food security. Deforestation to now sign off the new adversely impacts on climate change which impacts on our Legal Notice 121 for agricultural production and promotes conservation of the subsequent gazettement. Country’s forests. The statute aims to In this issue, we have focused on the evolution of the oil and gas achieve the desired landscape in the last two decades in terms of players, services legal and regulatory and the workforce. reforms in the LPG We take this opportunity to bid farewell to PIEA Chairman and segment which needs Total PLC Managing Director Anne Solange-Renouard who is to be implemented to taking up another role in another Country. unlock access to LPG in Kwaheri na Asante Sana! every corner of Kenya to replace kerosene, Wanjiku Manyara firewood and charcoal. General Manager

2 3 Tristar Group: Flying the CSR flag very high

nited Arab Emirates (UAE)-based Tristar Group inaugurated a CSR project worth an estimated KES11 Million at Kiserian Primary USchool in Kajiado County.

Tristar Kenya’s Nairobi team oversaw the construction of two new sanitary facilities for both

INDUSTRY NEWS INDUSTRY boys and girls, with modern cisterns and ﬂowing water, sanitary bins and hand wash dispensers. The school’s assembly area was also renovated to make it a good place for the pupils to assemble and play especially during the rainy season.

The public primary school for boys and girls has a population of more than 2,000 students and almost 50 teachers. It is located in Kiserian, Kajiado North Constituency and Ngong Division. Tristar Group CEO, Eugene Mayne (in spectacles) accompanied by Kiserian Primary School teachers inspects one of the ablution blocks built by the Group for the Tristar Group CEO Eugene Mayne, was present at School. Tristar Group renovated the school’s assembly grounds to make them the event alongside the management of Africa Fuels playable and passable during the rainy season and built three modern ablution and a representative of the Group’s other business blocks. Below; The School’s pupils in class during the projects unveiling ceremony lines such as the Road Transport and Turnkey Fuel Supply divisions. Mr Mayne told guest who included Mr Joseph Wafula, representative of the PS, Ministry of Petroleum and Mining that giving back to the community is embedded in the company’s corporate fabric.

“This habit was born with the establishment of our business, including the vision to conduct our business responsibly and with integrity. We are currently dedicated to the sponsoring of the education and accommodation of two orphans who are now studying at Maseno Boys High School and Ramba Boys High School. This Kiserian project is our second CSR project in Kenya,” explained Mr. Mayne who ﬂew in from the Group’s head ofﬁce in Dubai, UAE for the occasion.

In his speech, PS Andrew Kamau commended the efforts made by Tristar to make a positive impact in society. He emphasized that business takes place in the society and that business is not all about proﬁts “This habit was born with the establishment of and bottom lines but also about touching lives in a positive way. our business, including the vision to conduct our business responsibly and with integrity. He noted that the Jubilee government is in the process of implementing its Big Four Agenda where the energy and the education sectors have bigger in the UAE and operating in 18 countries with more than 1,800 employees. roles to play in achieving the desired outcomes. He Tristar’s core expertise lies in handling hydrocarbons, lubricants, chemicals said that there cannot be industrialization without the and liquid gases with dedicated facilities to manage road transport, requisite energy and manpower to run the industries. warehousing, fuel farms, turnkey fuel supply operations, plane fuel services, ship owning and chartering for clean petroleum products. “Manpower comes from schools, and by supporting school activities like the Tristar CSR, we stand to The Group is also supporting education in South Sudan. In 2009, it make huge leaps and bounds in our agenda,” he funded the construction of a primary school building with three classrooms said. outside the capital, Juba. In 2012, the school was upgraded to secondary

level with the construction of four additional classrooms. In 2013, Tristar Tristar is a fully integrated Liquid Logistics Solutions donated a block of three classrooms to the Gabat Primary School in Juba provider catering to the needs of the petroleum and and a Computer Lab in 2018, making it the ﬁrst school in South Sudan to chemical industries. The company is headquartered introduce computer classes for young students.

4 5 ERC urges media to KPC Raises enhance informative Storage reporting Capacity

he Kenya Pipeline Company has put up four new storage tanks in Nairobi to enhance security of oil Tsupply for Kenya and the region. The KES5.3 billion project was undertaken by Prashanth Projects Limited and is set to change the oil supply chain landscape signiﬁcantly and raise KPC’s total storage capacity up to 745 million litres from the current 612.3 million litres. It is also expected to enhance operational ﬂexibility and increase tank turnaround for Kipevu Oil Storage Facility in Mombasa.

“This development provides sufﬁcient capacity for receipt of higher volumes of products expected from Line 5. It also doubles Nairobi’s storage capacity from the current 100 million litres to 233 million litres,” KPC Managing Director Mr Mr. Pavel Oimeke, Director General ERC Joe Sang says.

The tanks are done to international standards complete with world he Energy Regulatory Commission (ERC) Director General, Mr Pavel Oimeke, class automated firefighting system has called on the media to act as a catalyst for citizen participation in the installations. Each of the four tanks has a energy sector through informative reporting. holding capacity of 33.4 million litres; the T tanks will carry diesel and super petrol. Mr Oimeke made the call during a two day media-training workshop hosted by ERC in Meru County on 9th and 10thOctober 2018. The workshop’s objective was to equip Mr. Sang explains that the project will journalists with skills to authoritatively and responsibly report on energy sector issues. reduce costs and improve business value along the oil industry supply chain. “This Mr Oimeke noted that media coverage on sector menaces such as fuel adulteration has project will definitely create more ullage seen such cases plummet due to increased citizen involvement in reporting offenders. (storage space) in Kipevu, Mombasa and “In the recent past, the Commission has carried out crackdowns against unlicensed cause reduction of demurrage charges. and illegal petroleum operators engaging in malpractices such as fuel adulteration. This will cut costs significantly along the Media coverage of these crackdowns has contributed to increased public awareness supply chain giving clients more value for and public participation in reporting suspects. The combined efforts have led to a their money,” the KPC MD notes. reduction in the menace,” he noted.

Further, the Director General asked the media to create awareness on ERC’s regulatory role in the energy sector. “The media should help consumers know what to expect of service providers. For example when hiring an electrician, consumers should ask to see This development their license to check if the person they are hiring is ﬁt to undertake the particular work provides sufficient they want them to do,” Mr Oimeke added. capacity for receipt of higher volumes of The media training workshop drew participation of journalists from Meru, Tharaka Nithi and Isiolo counties. Topics covered during the training include the role of ERC products expected in electrical regulation, economic regulation of the energy sector, enforcement and from Line 5. It also accurate, impactful and responsible reporting in the energy sector. doubles Nairobi’s Rosemary Gatiria, a Media Max correspondent based in Tharaka Nithi County, storage capacity from challenged her counterparts to create awareness on key issues in the energy sector the current 100 million in order to empower “Mwananchi” to participate in developing the sector. “We are the litres to 233 million light of the society; we need to inﬂuence positive change in the development of our communities and our county,” she said. litres

The Commission has in the recent past held similar media engagement workshops in Nairobi, Nakuru and Uasin Gishu counties.

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INDUSTRY NEWS INDUSTRY More Attention Overseas, Especially Africa

ince the beginning of the 21st global sales and service network. warm speech at the opening ceremony Century, economic globalization In response to the national call of “One of the exhibition to discuss the future has become an inevitable trend Belt and One Road”, Beijing SANKI development of oil and gas industry in Sin the world. With the positive extended the management experience of East Africa with professionals from all attitude of openness, mutual benefit China’s refined oil industry to developing over the world. The exhibition was jointly and common development, the African countries, in the global bidding organized organized by the East African Petroleum continent, an ancient and mysterious by the National Petroleum Ministry of Industry Association and Ministry of oasis, has once attracted countries Sudan. SANKI Group stood out from Energy and Petroleum Industry of Kenya. around the globe. Since inception, many excellent global enterprises and It attracted the attention of Kenya, Beijing SANKI Petroleum Technology Co. exclusively undertook the fuel station and Uganda, Rwanda, Tanzania, Zambia and Ltd has established an indissoluble bond oil depot digitization project for Sudan Zimbabwe. with the African continent. national oil companies. At the same time, SANKI group was So far, Beijing SANKI has built up Beijing SANKI is a subsidiary of SANKI working hard in product design and contacts with more than 60 countries Industrial Group and specializes in development, and had successively and sold its product to more than 40 the R&D of fuel dispensers, vehicle obtained OIML international countries and regions. Beijing SANKI has charging piles, CNG/LNG dispensers, measurement certification, ATEX and established factories or overseas offices environmental friendly double wall SF IEC international explosion-proof in Kenya, Nigeria, Russia and Australia, tanks, vapor recovery system and other certification, and product certifications aiming to provide more high-quality sales automation equipment for fuel stations. of Russia, Australia, South Korea and and services with convenience for more The company has a registered capital of many other countries. SANKI is the only global customers. ¥120 Million and over 1,000 employees. enterprise among Chinese fuel dispenser manufacturers entering developed In order to meet the increasing needs of SANKI Industrial Group is a preferred countries’ markets. domestic and foreign customers, SANKI supplier of Chinese national petroleum Industrial Group has built up five modern corporations, such as Sinopec, In May 2018, SANKI Industrial Group production and manufacturing bases PetroChina, CNOOC and SinoChem attended the leading European fuel in Beijing Economic and Technological and has been recognized as an station and fuel station equipment Development Zone, Zhengzhou High- excellent supplier for many years. Beijing sector show in Europe; the UNITI EXPO tech Development Zone, Hebei Gu’an SANKI is not only a participant in the in Stuttgart, Germany. SANKI Industrial Industrial Zone, Tianjin Binhai New Area digitization project of national petroleum Group and its seven subsidiaries and Henan Shangqiu Development corporations, but also a guide and displayed the latest products in the field Zone, covering an area of nearly 80,000 contractor of the informatization project of filling station equipment, ranging from m2 with annual production capacity of of most local refineries and private oil dispensing equipment, natural gas more than 60,000 fuel dispensers, LNG/ petroleum companies. filling equipment, underground storage CNG dispensers, vehicle charging piles In 2017, the company’s sales amounted tanks, fuel station management systems, and other products. to nearly ¥1 billion. In 2018, Beijing charging piles and so on. With its rich SANKI won the first place in the tender of product line and excellent R&D capability, Among them, three factories are for SINOPEC frame agreement (3rd phase) SANKI Industrial Group attracted wide fuel dispensing equipment production, procurement. attention from both domestic and foreign and the new factories in Tianjin and customers and industry colleagues at the Zhengzhou have further enhanced the Since its establishment in 2005, Beijing exhibition. production capacity of fuel dispensing SANKI has pursued the following equipment. We believe that Beijing business philosophy “deliver good Subsequently, in July 2018, SANKI SANKI will become the world’s leading product and service, grow the people Industrial Group had once more SANKI’s fuel station equipment manufacturer. and the business together, create value core management team participated in With more partners around the world, we and share the benefit”. Beijing SANKI has the East Africa oil summit held in Nairobi, will create a win-win situation for global always been acting locally and thinking Kenya. Mr. Shan, General Manager customers by providing more quality globally to seek common development of the SANKI Group’s International and perfectly customized products and opportunity with excellent partners for a Operations Center, was invited to give a services.

8 9 Upstream: Government working closely with communities

he Government is working closely social responsibility programs to meet the challenges of local communities. The with Oil and Gas companies to Government, he explained, is committed to ensuring they play their role in mitigating mitigate challenges and conflicts conflicts and enhancing social cohesion thereby ensuring a smooth exploration, drilling Tarising from local communities and transportation exercise of crude oil. and oil exploration/drilling firms. “We have also reviewed the petroleum policy, legal, regulatory and contractual While speaking during the unveiling of frameworks for oil and gas. This is aimed at encouraging oil and gas investors in our 2nd Quarter 2018 industry report in country, managing better our petroleum resources for the betterment of our people

INDUSTRY NEWS INDUSTRY Nairobi, Cabinet Secretary Ministry of and fostering co–operation between all our stake holders in the oil and gas sector,” Mr Petroleum and Mining Mr. John Munyes Munyes further explained about the government’s initiatives and incentives put in place said the Government has undertaken a to attract oil and gas investors scouting for business opportunities in the country. raft of measures to ensure a smooth flow of activities in exploration, drilling and Recently, there was a major standoff after communities in oil exploration/drilling fields in transportation of crude oil to Mombasa. Turkana County barricaded roads stopping trucks carrying crude oil to Mombasa. The Government and stakeholders intervened and resolved the conflict which had lasted a “As the arbiter, we are in close couple of weeks delaying transportation of crude in the pilot Early Oil scheme. collaboration with Oil & Gas players to foster and strengthen good relations with The Government has put in place measures and a strategic plan to maintain an the communities in the oil exploration enabling working environment for the oil and gas companies. The measures ranging fields. As you are aware, the challenges from conflict resolution and adherence to rules are meant to encourage the nascent we had recently have been overcome sector. and the trucks ferrying crude oil have delivered to the port of Mombasa,” the In the downstream segment, Munyes noted that the Government’s partnership with CS said in a speech read on his behalf NOCK initiated an LPG uptake Promotion which aims at increasing LPG usage by Chief Administrative Secretary, John penetration in the country. The ongoing campaign seeks to replace kerosene usage as Musonik. a cooking and lighting source of energy. “The oil industry has for a long time decried the challenge posed by kerosene in adulterating petrol/gasoline. “Increased uptake of The CS urged corporate institutions to LPG will not only go a long way in fighting the vice but also save on our car engines structure and enhance their corporate while also protecting the environment by reducing the importation and kerosene use in our country,” Mr. Munyes observed.

He praised the infrastructural developments in the oil industry especially the construction of the new pipeline from Mombasa to Kisumu.

Andrew Kamau, Principal Secretary, State Department of Petroleum, John Musonik, the Chief Administrative Secretary, Ministry of Petroleum and Mining, Ms Anne-Solange Renouard, Petroleum Institute of East Africa (PIEA) Chair, Stanbic Bank Kenya’s Head of Oil and Gas, Renato D’souza and Dele Kuti, Standard Bank Global Sector Head Oil and Gas display the 2nd Quarter Petroleum Insight after its unveiling at the Hotel Intercontinental, Nairobi on May 16, 2018.

10 PIEA -WLPGAEAST AFRICA

5% Discount For More Than for theTraining Workshop. Two Training Participants @ Only US$ 400+VAT LPG SUMMIT&TRAININGWORKSHOP 2019 SUMMIT ISFREE!! Organizers: Liquefied Petroleum GasGrowth Regulatory ChangesDriving in East African Countries. Intercontinental Hotel, 25 Nairobi, Kenya th –26 Venue: 2019 Date: th April,

REGIONAL NEWS National Oil to Kenya’s Elizabeth spearhead LPG Rogo shines at distribution plan Global Forum inistry of Petroleum and Mining through National Oil Corporation of Kenya (National Oil) has received consultancy support from the World Bank under Mthe Kenya Petroleum Technical Assistance Project (KEPTAP) to develop a comprehensive nationwide LPG distribution plan for the roll out of Mwananchi Gas.

INDUSTRY NEWS INDUSTRY According to National Oil’s CEO, Ms MaryJane Mwangi, the objectives of this consultancy are to support government’s objective of enhancing LPG penetration in the country by designing a comprehensive distribution model for Mwananchi Gas. The Mwananchi Gas project is targeted at household level and therefore, mapping beneﬁciaries across the country is absolutely important as well as determining the distribution requirements for the national project.

Specifically, the consultancy assignment will help in the following: Elizabeth Rogo, i. Mapping out of beneficiaries and the registration/eligibility Founder and CEO of Tsavo Oilfield Services plan for identified beneficiaries ii. Execution plan for rolling out distribution of discounted lizabeth Rogo, the Founder and CEO of Tsavo Oilfield cylinders Services was recently honored as a global leader in the iii. Establishing the resourcing (personnel and infrastructure 2018 Grit Awards in the United States. requirements) for successful execution E iv. Monitoring and evaluation mechanisms and tools to The Awards shine a spotlight on talent, careers and culture in continuously gauge the success and impact of the project the energy industry. The finalists were nominated for recognition in four different Ms Mwangi notes that the consultancy is also geared towards categories: entrepreneurs, individuals, teams and male supporting the industry with the much needed current champions. information for market projections. This will be achieved through The 2018 Awards were the 2nd Edition honoring 38 global the following: energy leaders and two corporate winners at a celebration in i. A comprehensive LPG market assessment and demand Houston and online. Geeta Thakorlal, president of INTECSEA projection building up on the 2013 GLPGP-Dalberg Kenya delivered the industry keynote and Crystal Washington, a LPG Market Assessment Report. workforce futurist spoke about the future of work in energy ii. Developing a national ‘heat map’ to define areas of greatest harnessing the power of digital. opportunity for LPG growth The GRIT Awards, sponsored by NES Global Talent and iii. Determining national LPG infrastructural requirements and Gapingvoid, were created to recognize women leaders in locations to support the demand projections energy, and the men who advocate for their progress. Nearly 150 nominations poured in from North America, the United The consultancy kicked off on 3rd July 2018 and is expected to Kingdom, Europe, the Middle East, Africa and Australia. take three months. National Oil will be collaborating closely with “We believe it’s important to recognize those who embrace key stakeholders including oil marketers through PIEA, ERC, growth and innovation as the industry undergoes a massive KPC among others to provide input for the consultancy and also transformation. It is time the energy industry and our people as part of the stakeholder validation process. The final report will socialize the great work we do in service for modern society,” also be shared with all key stakeholders. said Katie Mehnert, founder and CEO of Experience Energy, a division of Pink Petro. Winners were selected through a blind application review by four external judges. The judges included Tracey Bentley, Executive Director, Colorado Petroleum Council, Jay Copan, Senior Vice President at the American Gas Association, Paula Glover, President and CEO, American Association of Blacks in Energy and Melody Meyer, Non-Executive Director at British Petroleum, AbbVie, and National Oilwell Varco. “The industry is working to build the workforce of tomorrow. Part of that transformation means pulling together the brightest minds and recognizing those who are changing the industry from within. The GRIT Awards accomplishes all those things,” said Vicki Codd, marketing director for NES Global Talent. “And we were thrilled to be involved.” The finalists were nominated for recognition in four different categories: entrepreneurs, individuals, teams and male champions and announced on October 3rd.

12 TOTAL Motor Show 2018

he TOTAL Motor Show is the biggest motor show event The TOTAL Motor Show is a bi-annual event that was started in East and Central Africa. The event brings together all in 1994 by the Kenya Motor Industry Association with TOTAL major automotive dealers (from construction, agricultural, as the title sponsor. The traditional venue for the show is the Tmining, trucks, mass transport and passenger cars Kenyatta International Conference Centre. This year, 2018, the segments), auto accessory dealers, ancillary service providers TOTAL Motor Show was held on 29th June-1st July 2018, the and customers under one roof to show case, demonstrate next edition will be in 2020. sample the latest offerings in the automotive market. INDUSTRY NEWS INDUSTRY

Ms. Anne-Solange Renouard (second right), Total Kenya MD explains to President Uhuru Kenyatta about the new TOTAL Gas anti-counterfeit solution during the 2018 TOTAL Motorshow. Looking on is Adan Mohamed, CS Ministry of Industry, Trade & Cooperatives.

TRAINING CALENDAR, OCTOBER - DECEMBER, 2018

November 2018 SPS 035: Oil and Gas Fire Marshals/ Members: Ksh.25,000+VAT Non- 7 – 9 November 2018 Nairobi Wardens Training members:Ksh.30,000+VAT SPS 016: Petroleum Road Members: Ksh.49,000+VAT Non- 19 – 23 November 2018 Nairobi Transportation Management members:Ksh.62,500+VAT December 2018 SPS 028: Oil and Gas Train the Trainer Members: Ksh.35,000+VAT Non- 3 – 7 December 2018 Nairobi Course members:Ksh.40,000+VAT

*These and all other training courses are also offered on an in-house basis for members and non-members.

Petroleum Institute of East Africa - Fourth Floor, Bruce House P.O. Box 8936-00200 Nairobi - Phone: 254-20-2249081,3313046, 3313047 Mobile: 0722 221120 - Fax: 254-203-313048 Email: [email protected] - Website: www.petroleum.co.ke

13 Dalbit South Sudan bags Gulu and Goma WFP Jet Fuel tenders

At the Dalbit Goma depot, engineering works are at an advanced

INDUSTRY NEWS INDUSTRY stage to complete the fabrication of two petroleum products holding tanks. Each of them, with a capacity of 1 million litres, will be connected to ancillary infrastructure including a purpose-built fuelling bay with a further two storage tanks for Jet A1 and Gasoil fuels. nergy solutions services provider, Dalbit has secured two major petroleum products supply contracts with the World Food Programme (WFP) in Gulu, Northern Uganda and Goma, in the Eastern part of the EDemocratic Republic of Congo (DRC). Valued at approximately US$ 6.8 million and US$1.1 million, respectively, to stem severe hunger. The communiqué issued in the two tenders secured following a competitive bidding processes will see February confirmed that recent airlifts from France Dalbit International South Sudan supply Jet fuel to the WFP bases in Gulu and of Plumpy’Sup, a micronutrient-rich, ready-to-use Goma. supplementary food, have allowed WFP to treat 9,000 malnourished children in January. In Gulu, the firm has additionally completed the construction of a brand new operating depot with a capacity to hold more than 720,000 litres of Jet A1 Established in 2004, Dalbit has carved an enviable products. The firm is additionally building and will operate a depot to world- niche as the reliable and dependable energy class standards in Goma to facilitate the smooth execution of the tender. solutions provider of choice in the frontier regions. The operations will include a compact refuelling bowser configured to serve Using its state of the art facilities, it has established various types of aircraft. itself as a progressive petroleum supply company delivering competitive and cost-efficient energy The WFP is the world’s largest humanitarian agency fighting hunger worldwide, solutions across the continent. delivering food assistance in emergencies and working with communities to improve nutrition and build resilience. Each year, WFP assists some 80 million The firm provides efficient, innovative and people in around 80 countries. responsible energy solutions to clients in the development, humanitarian and economic sectors At the Dalbit Goma depot, engineering works are at an advanced stage to in the urban and remote regions of South Sudan. complete the fabrication of two petroleum products holding tanks. Each The firm has developed a fleet of operating of them, with a capacity of 1 million litres, will be connected to ancillary trucks customised to traverse the challenging infrastructure including a purpose-built fuelling bay with a further two storage terrain within its areas of operation, providing a tanks for Jet A1 and Gasoil fuels. responsible and distinct market differentiation.

The company operates four depots in Juba, Rumbek, Wau and Bor with a Dalbit South Sudan is also a keen investor in storage capacity of over 6 million litres for Gasoil and Jet-A14. people and communities; developing human skills “We are excited that Dalbit has secured the contract to supply WFP in Gulu and investing in projects and initiatives that offer and Goma and this works well with our commitment to fuelling regional equal opportunities to its people. In partnership growth across the social and economic development fronts,” said Country with the community in Rumbek, Dalbit continues Business Manager John Paul Ogondi. He also added “In such remote areas, to support Bishop Mazzolari School, building Dalbit is deploying tailor-made solutions including customised product delivery classrooms and amenities that have helped to options to enable WFP to meet its humanitarian mandate efﬁciently and cost provide continuous education and a sense of effectively.” normalcy to the children and the community.

In a news communiqué issued earlier this year, the WFP announced that it had scaled up its operations in the Democratic Republic of Congo’s Kasai Region

14 Kisumu Oil Jetty Boost Region he newly constructed Kisumu oil jetty is set to drastically reduce cases of fuel adulteration that have been rampant in western Kenya for a long time. TThe KES 1.7 billion KPC’s jetty, which was completed Gala Dinner 2018 in February this year, will boost Kisumu’s throughput by 1 billion litres yearly in phase 1, and up to 3 billion litres per year by 2028. FRIDAY, OCTOBER 26, 2018 | 7 PM ALMASI BALLROOM, Cabinet Secretary for Petroleum and Mining, John Munyes, MOVENPICK HOTEL & RESIDENCES accompanied by, Chief Administrative Secretary, John WESTLANDS, NAIROBI Mosonik, KPC Managing Director, Joe Sang, and other ministry ofﬁcials toured the facility recently. BOOK YOUR TICKETS NOW: “In July this year, the Energy Regulatory Commission (ERC) SHS 5,000 PER PERSON announced that the level of fuel adulteration in the country SHS 50,000 PER TABLE LUCKY DOOR MAIN PRIZE had declined from 25 to three percent following a major Two Nights for Two crackdown of the illegal cartels”, CS Munyes said. CONTACT PIEA ADMIN • at Movenpick Hotel IBN Battuta Gate, Dubai, “This jetty is a ﬂagship project that is going to boost Kenya’s MONICA MUEMA regional trade credentials. Kenya is in pursuit of other options +254 722 221 120 including breakfast. so as to make the jetty commercially vibrant,” the CS told [email protected] Flights excluded. reporters in Kisumu.

The completion of the jetty signiﬁes that KPC will regain its share of the East African petroleum market part which has been lost to Tanzania’s Central Corridor. This jetty is a flagship project that is going “The introduction of an oil jetty will transform to boost Kenya’s regional trade credentials. Kisumu into the region’s petroleum export hub,” Kenya is in pursuit of other options so as to said Mr Sang. make the jetty commercially vibrant,” the CS He added, “The Oil jetty is expected to create an told reporters in Kisumu. efﬁcient and commercially viable integrated marine fuel transportation system in the region resulting in reduced transportation costs for oil marketing companies”.

“The jetty is expected to increase maritime transport activities on the lake with the shipping and docking facilities required to support the venture also enabling other industries to develop additional transport services along the lake,”Munyes added.

The CS said sufﬁcient and an efﬁcient infrastructural system is vital to ensuring adequate, reliable and cost effective supply of petroleum products across East Africa.

15 Vivo Energy Kenya partners with Kisumu RFC

On 4th September 2018, Vivo Energy Vivo Energy Kenya Lubricants Sales Kenya, through its new Shell V-Power Marketing Manager, Stephen Gikonyo fuel & Shell Helix car engine oils said the game’s adrenaline, the players’ announced its sponsorship for the Dala We are excited by the energy reﬂected the qualities of Shell Sevens Rugby Tourney 2018 in Kisumu, entrance of Shell Fuels Fuels and engine oils, which enhance an

COVER STORY COVER the penultimate stop of the National engine’s output. Sevens Circuit Series. and their lubricants as sponsors for this year’s The sponsorship deal comes barely The sponsorship deal valued at KES1 Dala Sevens Rugby weeks after the petroleum company Million was to facilitate the planning of the launched its new fuels, Shell V-Power, Dala Sevens Rugby Tourney in Kisumu, leg. With corporate Shell Fuel Save Diesel and Shell Fuel the fifth in a six-leg series that includes; sponsorships like Save Unleaded, which are formulated the Prinsloo Sevens, Sepetuka Sevens, Vivo Energy Kenya’s with the latest DYNAFLEX Technology Kabeberi Sevens, Driftwood Sevens and that increases engine efficiency, improves the Christies Sevens in Nairobi at the tail guaranteeing the fuel cleanliness and the overall engine end of September. game’s growth, the performance. potential to dominate While speaking at the official The national Seven’s Circuit is an annual announcement of the sponsorship, the sport on a global series run by KRU, a host of Kenyan Kenya Rugby Union Secretary, Jeff stage in the near future clubs and universities across the country. Gangla thanked Vivo for supporting is realistic. The teams competing accumulate the tournament and appreciated their points in each leg with the overall winner commitment in growing the sport both declared champions. The Dala Sevens locally and internationally. tournament has grown in stature since its inception in 2006 and still has room to “We are excited by the entrance of Shell the return of Vivo Energy Kenya through grow with the recent addition of regional Fuels and their lubricants as sponsors their brands, Shell V-Power and Shell teams such as Kabras, Western Bulls for this year’s Dala Sevens Rugby Helix engine oils as a sponsor of the and a host of universities. leg. With corporate sponsorships like tournament. Vivo Energy Kenya’s guaranteeing the game’s growth, the potential to dominate the sport on a global stage in the near future is realistic. Such platforms provide opportunities for Kenyan rugby professionals to compete at a world stage,” said Mr. Gangla. The partnership will be the second time Vivo, through Shell V-Power & Shell engine oils will be sponsoring the Kisumu rugby sevens tournament following a successful engagement that begun in 2016.

Also in attendance during the partnership launch, was Dala 7’s executive committee All smiles as Kisumu RFC receive a sponsorship cheque from Shell member, Gideon Kidenda, who V-Power and Shell Helix Ultra. L-R Kenya Rugby Union Secretary, Jeff expressed Kisumu Gangla, Dala 7’s executive committee member, Gideon Kidenda, Vivo RFC’s excitement on Energy Kenya Lubricants Sales Marketing Manager, Stephen Gikonyo and Vivo Energy Kenya Finance Manager, Werner Dreyer

16 The market has evolved positively

hankan Enterprises Ltd and in the polytechnics and the Premier Agencies Group training them on the of Companies provide support job. Sto Oil Marketing Companies in the East Africa region. Shankan are Mr Sharma observes

distributors of a wide range of Petroleum that since the STORY COVER equipment and responsible for the oil industry was marketing and importation requirements liberalized in the early of the entire group of companies. ‘90s, indigenous companies have grown According to Mr Varun Sharma, the rapidly. Most of the Managing Director (MD), the history “independents” had of Premier Agencies dates back to one or two retail outlets 1964 when Mr Raj Sharma established back in those days. it in 1964 as a sole proprietor. “The Now their numbers business started with one vehicle and the have grown to 30s and responsibility of 150 pumps owned by 40s. It is encouraging Mobil Kenya Limited. It has now grown to see that the quality into a company employing a staff of 80 of sites has also regionally and a fleet of service vehicles evolved positively to support their services throughout the for both the smaller region,” the MD says. players as well as the majors. As the pioneer in the region, the companies boast of numerous firsts. “The station has Mr. Varun Sharma, MD Shankan Enterprises These include; first company to import evolved beyond just electronic pumps into the region, first fuelling. We see more company to install electronic metering at coffee shops, fast food outlets, auto banking, pharmacies and other services attached petroleum terminals, and first company to the stations. The majors are working with international brands while the smaller to introduce submersible players are also catching up pumps at retail stations. fast,” Mr Sharma adds. And although challenges such as Recently, Shankan has competition and a shortage of technical One of the outstanding led the industry into achievements in the industry is retail automation both manpower still face companies such the death of risky, substandard in tank gauging and as Shankan, Mr Sharma is confident of and cheap sites that were a forecourt control. It has the future. He believes once a customer menace in the ‘90s. To a large also installed terminal extent, the authorities have automation system and understands the quality and longevity of managed to vanquish random integrated the same a product, they will choose better. The sites that do not meet set with clients’ enterprise company is also scouting for young talent in standards. software and further automated lubricants the polytechnics and training them on the The beast that is still rearing its workshops. “In short, job. ugly head is fuel adulteration automation is the new and LPG malpractices. name of the game,” the According to the Shankan Shankan MD says. MD, the upward re-adjustment of kerosene taxes is a step in the right direction. He notes that this is a significant And although challenges such as achievement by the industry after many years of lobbying through PIEA. The next move competition and a shortage of technical should be to ensure LPG flourishes by getting rid of illegal dens and bringing cylinder manpower still face companies such malpractices to an end. as Shankan, Mr Sharma is confident of the future. He believes once a customer The recent destruction of counterfeits and illicit products by President Uhuru Kenyatta understands the quality and longevity of sent a strong message to the country. It is now clear that an importer can lose their a product, they will choose better. The entire shipment if they are defective of unlawful. company is also scouting for young talent

17 Enforcement of existing laws and new statutes needed to protect local

he government must enforce keep abreast and keep enacting facilitative with technology. legislation to promote local He vouches for content and support local partnerships

COVER STORY STORY COVER T companies’ build their capacity. with foreign firms The Chief Executive Officer (CEO) Kurrent and a network Technologies Ltd, Eng James Mwangi of associates to outlines foreign companies contracting, enhance skills issuance of work permits to foreign and technology experts and presence of unlicensed transfer to develop professionals in the country as some adequate resource of the areas the government needs capacity and a to safeguard in order to expand local global competitive content. edge. He further points out that “The government must institute a raft local institutions Eng. James Mwangi, CEO Kurrent Technologies. of measures including enactment and must be innovative enforcement of legislations that enhance enough to understand the needs of their local content. It should also encourage customers and provide them with tailor- transparency in tendering processes made solutions. to rope in local companies which are equally qualified for some of the “Companies must also understand international businesses available locally,” the legal and regulatory framework in Eng. Mwangi says. their sectors of operation. They must He urges private constantly stay ahead by acquiring new The Kurrent Technologies founder skills though reading, training, attending companies and public add that there is need to undertake conferences, making presentations, institutions to embrace a skills gap analysis especially in the engaging lobby groups and being and inculcate a good oil industry to align missing skills with members of professional bodies in their culture of corporate training opportunities, to enable Small respective areas of expertise,” Eng and Medium Enterprises (SMEs) acquire Mwangi adds. governance to enhance competence skills and access financing their performance as opportunities. Eng. Mwangi observes The Kurrent Technologies CEO cites poor a tool of promoting that this would not only assist the definition of project by clients, inadequate government in tracking performance of of no feasibility study for projects, unfair integrity and companies but also asses their technical tendering, corruption, delayed payments professional ethics in capacity. and poorly defined tenders as some towards achievement of the key challenges local companies “Undoubtedly, the skills gap analysis will face in competing for international of organizational and boost the government’s Big Four agenda businesses. Other challenges include national development by creating employment opportunities, foreign competition, extremely ambitious goals. reducing cost of production, retaining timelines by clients, unfair competition wealth in the country and contributing from unlicensed professionals, lack to Kenya’s economic growth. It will of tender evaluation criteria and also encourage locals to partner with incompetent technical personnel. include; construction of KPC’s Line 5, international firms which will enhance construction of VTTI depot in Mombasa, capacity of local institutions through He urges private companies and public design and construction of National Oil transfer of skills and global best institutions to embrace and inculcate a and Kenol Kobil LPG plants in Nairobi. practices,” Eng Mwangi, who is also good culture of corporate governance Other engineering works undertaken Chairman of the Energy and Extractives to enhance their performance as a tool by Kurrent Technologies include; being Sector board at Kenya Private Sector of promoting integrity and professional ESI for Amu Power, Kipeto Wind Power Alliance (KEPSA), says. ethics in towards achievement of project, construction of Gulf Energy organizational and national development thermal power plant and construction of At corporate level, Eng. Mwangi advises goals. Petro City depot at Konza. The company local companies to uphold high level of is currently working on the Front End professional discipline, upscale their Some of the key projects that Engineering Design (FEED) for Lokichar technical skills through training and Kurrent Technologies has undertaken field development; a Tullow Oil project in Turkana.

18 Local content evolution: A pioneer’s perspective By George Wachira

demands study; establishment of was awarded a state commendation – STORY COVER Botswana National Oil Company; KPRL MBS, by President Mwai Kibaki for his transition from Toll to Merchant refining; contribution in the energy sector. Rwanda petroleum strategic storage implementation; Kigali Airport Jet A-1 In his spare time, George is an supply economics and strategy . accomplished dairy farmer in Nyeri County and also takes an interest in eorge Wachira is a pioneer Some of the upstream tasks undertaken mentoring students who request his consultant in the oil and include the ongoing Lokichar basin assistance in the areas of oil and gas. He gas sector. He established development FEED studies; GIZ/SOGA also maintains a weekly opinion column Petroleum Focus Consultants G upstream skills development project; with the Business Daily newspaper which in 2000 to undertake studies in Lokichar basin early oil commercialization he has written every week without fail downstream, midstream and upstream options; RVR study on early oil export since 2010. oil and gas in the wider Eastern Africa logistics at KPRL; Lokichar development region. He says the consultancy has energy options; and South Sudan Mr Wachira has seen the oil industry achieved the objective he set out to upstream sector forward strategy; and transform from multinational and achieve. TORs for South Sudan upstream sector expatriate domination in the 1970s to audit. significant participation by Kenyans Niche areas of his consultancy include Mr Wachira’s oil and gas journey and local enterprises. The Ministry in petroleum supply chain infrastructure started in 1970 when as a Shell student charge of Petroleum and the regulator - and logistics studies; market and project undertaking Chemical Engineering at ERC have supported local participation feasibility studies; investment climate Surrey University (UK), he joined the Shell while still availing market entry by and risk assessments; energy and oil managed Mombasa refinery. In 1975, foreign investors. Accroding to George, policies, legal and regulatory frameworks; he joined the ExxonMobil companies in Kenyan businesses have managed to merger and acquisition due diligence Kenya where he rose to be the director maintain good standards of operation, as and organizational capacity building. in charge technology and skills transfer to Kenyans (at various and their businesses have taken place times) of at a rate that exceeds many countries in I believe exploration, drilling and supply, Africa. transportation of the oil deposits in the economics and However, he observes that in upstream region should sound a wakeup call to corporate oil and gas, we have not moved as fast the respective governments to re-think planning, since oil was discovered six years ago. enhancing manpower and capacity of distribution “We still have significant gaps in local logistics, skills and in capacity for sector enterprise institutions in taking up these specialized engineering, participation. This is an area that we need engagements, especially in the oil industry. international to fast track so that when construction business works for crude oil production and export and pipeline begins, we have significant local Petroleum Focus lubricants content participation,” he says. associates with a number of local and business. overseas consulting firms in various He further opines that the country needs fields of specialization. He took early retirement from to move fast to put in place upstream Mobil Kenya in 2000 to commence legal, institutional and regulatory Some of the projects the consultancy consultancy. During this time he also framework. He feels that time for studies has undertaken include the LAPSSET served as the CEO of Petroleum Institute and forums is now up as investors and corridor refinery feasibility study; of East Africa (PIEA) for six years and the country await working systems and Rwanda downstream petroleum was also a director of Kenya Pipeline capacity to enable the sector catch up master plan; Uganda downstream Company (KPC) for six years. He was a with the rest of the oil and gas world. petroleum regulatory framework; ERC founder governor of KEPSA; a member petroleum regulations; the 2017 ERC of National Environmental Council (NEC); Email; [email protected], www. cost of petroleum supply and pricing and a committee member of NAFFAC petroleumfocus.com formula review; KPC Line 5 petroleum at the Ministry of Energy. In 2007, he

19 Training is the engine of local content growth

opportunities arising from the recent oil discoveries in Kenya and the region would mostly beneﬁt foreigners who possess the requisite expertise and experience.

COVER STORY COVER “I believe exploration, drilling and transportation of the oil deposits in the region should sound a wakeup call to the respective governments to re-think enhancing manpower and capacity of institutions in taking up these specialized engagements, especially in the oil industry. Importing manpower has implications on a country’s economic trajectory,” Mr. N g’ang’a adds. He vouches for strong and structured partnerships between the government and private players in supporting training and offering scholarships opportunities for training outside the country to enhance local capacity.

Mr. Ng’ang’a implores Oil Marketing Companies in Kenya and the region, to structure and expand trainee intake programs to absorb trainees from local institutions for hands on experience. Though the former marketer with Shell lauds some Oil companies for offering scholarship and training programs, he feels that some OMCs have not integrated their trainee intake with the School of Petroleum Studies. He calls for collaboration between HR Mr. John Ng‘ang‘a, Resource Person, School of managers and training institutions to enhance trainee placement Petroleum Studies. for internships.

The School of Petroleum Studies was incorporated in 2007 as a wholly owned subsidiary of Petroleum Institute of East Africa (PIEA) with the prime objective of offering ﬁrst- I believe exploration, drilling and class specialized training with a curriculum focused on downstream and upstream oil and gas. transportation of the oil deposits in the region should sound a wakeup call to Mr. Ng’ang’a lauds the formation of the school noting the respective governments to re-think that besides equipping trainees with skills, the institution has added value to OMCs and the public by availing enhancing manpower and capacity of information on the industry. “Through training, we have institutions in taking up these specialized managed to get oil and even non oil companies to start engagements, especially in the oil industry. going for courses to understand what they deal with. Through partnerships, we have undertaken training on product knowledge with public and other stakeholders, to equip them with knowledge on petroleum business, enya has come of age and time is ripe for the prevention and management of petroleum related disasters; this government to align training methods with the market has saved many lives,” he says. needs of the oil industry. K Mr Ng’ang’a is a seasoned professional with vast oil industry This includes curriculum review, creating the necessary experience. infrastructure and providing requisite manpower for specialized The banker-turned marketer started his career in the oil industry training in the industry from the smallest to highest levels in with Shell in 1979. The company took him for various courses both upstream and downstream segments. overseas up to 1980. He returned to Kenya as the regional head of marketing. He served Shell in many senior positions until These sentiments were expressed by Mr. John Ng’ang’a retirement in 2008. a longtime School of Petroleum Studies resource person He is a pioneer resource person at the School of Petroleum during an interview with Petroleum Insight Magazine. Acting Studies. locally and benchmarking globally is important. Currently,

20 Fundamental shift in attitudes vital in ﬁght against illicit trade, corruption

The compliance role of the multi agency Acknowledging that poor manning team cuts across all sectors of the of Kenya’s borders and laxity at the economy, with membership drawn ports have contributed to influx of from government institutions and illegal immigrants, contraband and tax trade agencies. Some keygovernment evasion, Mr. Musiambo promises that members of the team include; the the enhanced capacity the enforcement Kenya Police Service, Kenya Revenue team has put in place in these areas will Authority,the Anti-Counterfeit Agency, yield good results. He divulges that so far STORY COVER Kenya Bureau of Standards, NEMA and 196 foreigners have been arrested and KEPHIS. Other members of the team 72 have been taken to court for various charged with delivering coordinated offences. results through RRI are; Agricultural Food Authority, Pharmacy and Poisons Board, “We have put in place stringent the Energy Regulatory Commission, mechanisms to man our entry and exit Departments of Immigration and Health, points. In particular, we have instituted Mr. Wanyama Musiambo, Deputy Head Trade bodies among other entities. 100% verification and inspection of of Public Service and Chairman of the containers at the ports to enhance Multi-Agency Enforcement Team Against According to Mr. Musiambo, the team surveillance,” he adds. He feels that Counterfeits and Illicit Trade. has since inception in May 2018, though a lot has been done to safeguard successfully impounded goods and other the entry points, more surveillance illicit products worth KES 8billion from gadgets especially scanners should be across the country. “On 31st August, provided and officers at the entry points enyans require ashift in attitudes this year, His Excellency the President trained. both at individual and corporate led the destruction of goods and vehicles levels in-order to win the war worth KES1.5 billion in a yard at East Mr. Musiambo says the team will be Kagainst counterfeits and illicit Africa Portland Cement premises for tax conducting outreach sensitization trade as well as runaway corruption. evasion,” Mr. Musiambo explains. programs across the country to educate the public on counterfeits and their role in In an interview with Petroleum Insight Further, Mr. Musiambo explains that information sharing. He lauds KEPSA and Magazine, Deputy Head of Public Service their scope spreads across the entire other trade bodies for information sharing and Chairman of the Multi-Agency economic spectrum. In the oil industry, which has yielded positive results. Enforcement Team Against Counterfeits the agency has impounded products, and Illicit Trade, Mr. Wanyama Musiambo made arrests and destroyed structures “The public and private sectors should observes that proliferation of counterfeits that are used to engage in malpractices support the government’s efforts in the in the country and entrenched illicit trade in LPG, fuel and lubricants segments. fight against corruption. Deliberate and are as a result of wrong attitudes which In Kiambu and Thika, illegal LPG filling sustained effort by all will go a long way tolerate these practices and corruption. structures havebeen flattened, while in to eradicate counterfeits in all sectors; it Eldoret adulterated fuel has been netted is possible,” Musiambo adds. “Wrong attitude does not only breed and 11 people taken to court. Other corruption, but also enables related seizures of different products in various vices to thrive. Counterfeits, illicit trade parts of the country have also been and illegal immigrants are all products made. Motor vehicle spare parts, food of corruption. So, our role as an agency stuffs, construction industry and alcoholic is to eradicate the vices by enforcing drinks are other sectors severely hit by complianceto achieve the national the counterfeit menace. agenda of implementing the Big Four and So, our role as an realization of Vision 2030. Part of that Though the agency has made agency is to eradicate role is indeed fighting corruption,” Mr. commendable progress, Mr. Musiambo the vices by enforcing Musiambo said in the interview. notes that confiscation and destruction of illicit goods is a process that takes complianceto achieve The government put in place the multi- a while because they are subjected the national agenda of agency enforcement team to support the to various investigations by several attainment of the Big 4 agenda by among implementing the Big government bodies. “Various bodies Four and realization of other things promoting and protecting are involved at different stages e.g. the local manufacturing industry from in investigation, seizure, testing and Vision 2030. Part of that unscrupulous dealers in illicit trade. analysis to check conformity of goods to role is indeed fighting This is meant to spur economic growth quality standards. If they fail the test, we corruption. and create jobs and wealth, to ensure move to obtain court orders to destroy Kenya joins the league of middle income the contraband and arraign the culprits countries as espoused in the Vision 2030 in court; this takes some time,” he notes. economic blue print.

21 ACA Chair calls for all-inclusive collaboration

Ms Flora Mutahi, ACA board chairperson COVER STORY COVER

he Anti-Counterfeit Agency (ACA) of any country. For instance, in the recently destroyed. These efforts must is the front-line coordinating government’s Big Four Agenda, growth be sustained. government body mandated to in manufacturing is directly correlated to “Any business that practice counterfeiting Tcombat trade in counterfeits and how authorities protect investors from is involved in an unethical and criminal to enforce intellectual property rights in counterfeiting and illicit trade. act that goes against the principles of Kenya, under the provisions of the Anti- corporate governance. Under the rules Counterfeit Act 2008. “It is universally acknowledged that an of corporate governance, industries are IP portfolio contributes significantly to meant to be compliant to state laws and ACA also create public awareness and the value of a company, with estimates regulations by being transparent in their train stakeholders on counterfeiting suggesting that up to four-fifths of operations.” the ACA Chairperson says. matters as well as coordinate with the corporate value can be based on The private sector plays a pivotal role local, regional and international bodies intangible assets such as patents and in fighting counterfeits. Currently, a involved in combating counterfeiting trademarks. By protecting Intellectual cooperation framework called Joint under the State Department for Trade Property, we promote innovation and Campaign Against Counterfeits (JCAC) in the Ministry of Industry, Trade and in effect make our economy more is in place. JCAC’s membership is Cooperatives. competitive, productive and sustainable,” drawn from the public and private sector Ms Mutahi adds. stakeholders including Kenya Association According to Ms Flora Mutahi, the of Manufacturers (KAM), The Retail ACA board chairperson, the Agency’s During the Jamhuri day celebrations on Traders Association of Kenya (RETRAK), core values include diligence, integrity 12th December, 2017, President Uhuru The Petroleum Institute of East Africa and vigilance. ACA has a critical role in Kenyatta directed the Anti-Counterfeit (PIEA), Consumers Federation of Kenya combating intellectual property rights Agency and KRA to destroy counterfeit (COFEK), among others. infringements to spur innovation, goods upon seizure as part of measures industrialization and economic growth. to deliver on the Big Four Agenda. The major gaps in fight against The agency promotes the ‘genuine’ counterfeiting include un-tethered across the key segments of the economy. To effect this directive, a Multi-Agency collaboration. Looped, structured team comprising of ACA, Kenya Revenue collaboration by all brand owners, “We recognize that investors have Authority, National Police Service, government agencies, and consumers invested lots of resources in building their National Intelligence Service, Public needs to play out on the battleground. brands and it is our duty to protect their Health, Office of Directorate of Public Both regional and international Intellectual Property (IP) rights. There is a Prosecution, KAM, Kenya Plant Health collaboration is also needed. lot of economic gain in protecting IP as Services and Kenya Bureau of Standards investors go where they feel protected. among other institutions, was formed. The ACA’s future plan is anchored on We need to educate our people not to education and public awareness that rush for cheap but seek out the genuine,” The Multi-Agency team headed by involves; capacity building programs, Ms Mutahi says. the Deputy Head of Public Service Mr. border inter-agency program, county Wanyama Musiambo has been in joint awareness program, stakeholder Protection of intellectual property operation since April 2018. The team management framework, promoting is universally acknowledged as key has apprehended goods worth over KSH genuine, public outreach, educational driver in the industrialization agenda 7.5 Billion and others worth KSH 1.5B outreach including the media.

We recognize that investors have invested lots of resources in building their brands and it is our duty to protect their Intellectual Property (IP) rights. There is a lot of economic gain in protecting IP as investors go where they feel protected.

22 KAM lauds recent government efforts

He urges private companies and public institutions to embrace and inculcate a good culture of corporate governance to enhance their performance as a tool

of promoting integrity and professional STORY COVER ethics in towards achievement of organizational and national development goals.

Mr Gudka hinted that difﬁculties in accessing up-to-date and reliable data on illicit trade has made it impossible to fully understand the nature of the trade for many manufacturers. Fast moving consumer goods are more likely to be counterfeited due to their high demand and ready market.

Mr. Sachen Gudka, KAM Chair “As KAM, we have noted continuous efforts by the government to tackle illicit trade in Kenya i.e. the establishment of Multi- Agency team that is composed of Anti-Counterfeit Agency, enya Association of Manufacturers (KAM) is the leading Kenya Bureau of Standards, Kenya Revenue Authority, Weights Business Member Organization in East Africa advocating and Measures, National Police Service, National Intelligence against counterfeit products, and has played a noticeable Service, Public Health Pharmacy and Poisons Board,” he notes. Klead role in the war on counterfeits and other forms of The Multi-Agency team has been meeting regularly and working illicit trade in Kenya, and the EAC region. tirelessly to execute intelligence-led enforcement operations within the country under the Rapid Response/Results Initiative Initially, KAM advocated for the successful enactment of the Anti- (RRI). Counterfeit Act 2008 and its Regulations, which provided for the establishment of the current Anti Counterfeit Agency (ACA). KAM have come together with institutions such as the Judiciary According to KAM Chair Mr. Sachen Gudka, their advocacy work in the fight against illicit trade which has led to the development started back in the year 2000 when manufacturers vocalized of the Illicit Trade Manual for combating illicit trade. The their loss of market share due to product imitations in the Association also has the report on the Intellectual Property Kenyan market. These counterfeits were not only infringing on Rights (IPR’s) regime within the East African Community that is their intellectual property rights but also eroding the reputation focused on identifying gaps and recommending best practices of their products and companies at large, which have been to eliminate illicit trade in the region. cultivated earnestly over time through continuous research and development. The Report recommends for instance, setting up of Anti- counterfeit agencies in all the EAC Partner States, Raise In an interview with Petroleum Insight Magazine, Mr. Gudka Awareness on Intellectual Property Rights, train personnel says the fight against illicit trade has been a difficult task despite involved in intellectual property, legislate reforms in the EAC, numerous collaborative efforts by both Government and Industry. and establish an EAC intellectual property training institute and Recent efforts to embolden the initiative by the Office of the regional property office. President assures investors of the full Government support in terms of resources, intelligence and security apparatus. Mr Gudka lauds President Uhuru Kenyatta’s appointment of “Counterfeits and illicit trade diminish our efforts to achieve the the Deputy Head of Civil Service, Wanyama Musiambo, to Big Four agenda as a country because every pillar of the agenda spearhead this campaign on the fight against counterfeits and is gravely affected and inundated by counterfeits and criminal illicit trade. “This Presidential directive has facilitated an increase networks”, he says. in public awareness on the various forms of illicit trade, and the steps being undertaken to curb this vice,” Mr. Gudka said. According to a study on the vice done in 2012, it is estimated that an approximate Kshs. 30 billion (US$ 42 million) is lost by KAM will continue to advocate for the Implementation of the Kenyan manufacturers per year, while the Government loses over Trade Remedies Act (2017) which seeks to deal with unfair trade Kshs. 6 billion (US$80million) annually as potential tax revenue. practices such as dumping, subsidizing and import surges and “Illicit trade is a global phenomenon, and it undermines the the need to adopt technological measures to fight illicit trade. concept of a free and open marketplace, which is fundamental The Association is also pushing for the establishment of a to improving competitiveness, increasing investment, generating special court to fast track rulings and a review towards stiffer jobs and improving the economy,”, he adds. sentences and penalties.

23 Government will not relent in illicit trade war In the midst of a rejuvenated war on illicit goods and counterfeits by the government, Petroleum Insight sought out Dr Chris Kiptoo, Pricipal Secretary, Department for Trade in a candid interview.

Excerpts:

COVER STORY COVER Brieﬂy give us a brief history about the role of QState Department for Trade?

A: The State Department for Trade was established vide Executive order No.1/2016 of May, 2016 on the organization of the Government of the Republic of Kenya. The Mandate of the State Department is to manage the development and promotion of Kenya’s Trade both at the Domestic and International level. In order to fulfill its mandate the Department oversees the following Institutions; 1. Africa Trade Insurance Agency 2. Export Promotion Council (EPC) 3. Kenya National Trading Corporation (KNTC) 4. Kenya Institute of Business Training (KIBT) 5. Business Premises Rent Tribunal (BPRT) 6. Anti - Counterfeit Authority 7. Brand Kenya Dr Chris Kiptoo, Pricipal Secretary, State Department for Trade How does it contribute to Industrial and the Country’s economic growth? Q of WTO Countries which called for the amendment of the Trade Related aspects of Intellectual Property Agreement (TRIPS) to A: The Vision 2030 identifies trade sector as a pillar to provide for flexibilities in producing medicines to address public spur double digit economic growth to transform health concerns at reasonable cost. Kenya. Trade has been and will continue to support manufacturing by: 2.5.Promotion of locally Produced Goods and Services: This is being done under “Buy Kenya - Build Kenya strategy”. Our 2.1. Negotiating for market access opportunities; Currently, manufacturers in Kenya have done a lot to improve their Kenya has market access opportunities that manufacturing practices to produce goods that meet international have negotiated at Bilateral, Regional and Multilateral standards but many Kenyan consumers seem not to be aware of Level. these efforts. They continue to prefer imported goods irrespective of their quality. 2.2 Resolving trade disputes and conflicts arising from trade and commerce at Bilateral, Regional : In your view what is the biggest impediment to trade, and Multilateral level which cover Goods & Services industrial and economic growth? including manufactured products. These also include Q negotiations on finding solutions to the problems of Non A: We have good government policy such as the Vision 2030 that – Tariff Barriers to trade (NTBs) which arise from time to is necessary for Trade, Industrial and Economic Growth. The time. biggest impediment is in Execution and Coordination. 2.3.Enforcement of Fair Trade Practices and Consumer Another impediment is consistency and predictability in policy. Protection; In our efforts to promote fair import Issues revolving around consistency and predictability of competition, the 11th Parliament enacted the Trade Government policy need to be addressed. Remedies Act, 2017. : From the department’s perspective, what are the reasons 1.4.Use of Flexibilities in international Treaties to access behind the proliferation of counterfeits and illicit products Universal Health Care; Kenya has been at the forefront Q in the country? in looking for opportunities that allow the Government to address public health concerns in an affordable A: Let me clarify that counterfeits products are some forms of illicit manner. That is why in 2005; Kenya joined a number products. Illicit products are broadly defined to include counterfeit

24 while depriving the government of the much needed revenue to provide public services. Further, it undermines manufacturing and creatives causing huge The World Bank indicates that illicit trade unemployment. has increased 7 times faster than legal trade since the 1990s and is well over $ 1 trillion. The IMF & World Bank estimates : What is the place of technology and innovations Qin enhancing the ﬁght against counterfeits? that this parallel economy represents 15-20% of global GDP. This is huge and A: Technology and innovation is key in the war against signifies the magnitude of the problem of counterfeits. Some IP owners have invested in technologies which can identify their genuine products this vice. against fakes and have made the technologies available to some Customs Authorities in some jurisdictions. This has enabled the war on fakes to be worn. In fact, where such technologies exist and training collaborations products, pirated products, contraband goods, unaccustomed between IP owners and law enforcement agencies STORY COVER goods and substandard goods. exist, there is minimal or nil counterfeiting.

Trade in Illicit products is a global problem. It is not only confined : What role should wananchi and private sector to Kenya. If we look at the global context, In 2013, According to Qinstitutions play in the fight against counterfeits the Business Action to Stop Counterfeits and Piracy (BASCAP),- and illicit products? An intellectual Property (IP ) arm of the International Chamber of Commerce, the total value of counterfeit and pirated goods stood at arrange of $923 billion – 1.13 trillion and it is forecast to rise to A: Wananchi and Private Sector Institutions have a big $1.9-2.81 trillion by 2022. role to play in the fight against Counterfeits and Illicit Products. First, by providing information on where the The World Bank indicates that illicit trade has increased 7 times products are stored and traded. Second, the private faster than legal trade since the 1990s and is well over $ 1 trillion. sector, should not accept to trade in illicit products. The IMF & World Bank estimates that this parallel economy Wananchi should also stop buying them. When there represents 15-20% of global GDP. This is huge and signifies the are no handlers and buyers of the products, the magnitude of the problem of this vice. market will die. This is however difficulty since some counterfeits may be as good as the genuine product. What are the gaps? Q Third, the private player whose intellectual property has A: The Gaps lie in weaknesses in national regulatory regimes been stolen should come forward and jointly work with and global financial and transportation links. This has been the law enforceable agencies. The court cases and exacerbated by rapidly expanding technology contributing convictions will be easily worn when they come forward immensely to the proliferation of pirated goods such as software, as complainants and assist to differentiate between the audio and visual works. genuine and fakes. Q: What needs to be done? Q: Any Other Comment? A: There is need to address weaknesses in national regulatory A: The Government is committed on the war against regimes, global financial and transportation links to deny the illicit illicit trade and will be in it for the long haul. We have traders the avenues for benefiting from illicit trade. heard some traders suggesting they cool off until the Government relaxes. There will be turning back Further, coordination of law enforcement at the national level need on this. The current war is under the Rapid Results to be enhanced and cooperation framework at the international Initiative (RRI). The next phase is moving towards level developed to address transboundary challenges. legal and regulatory reform where the penalties for dealing with illicit trade will be very severe which may There is also need for public awareness on the dangers of include asset forfeiture, imprisonment, destruction of consuming or using illicit products. Public awareness is key in the goods at owners/importers costs or a combination of war against illicit trade. both. It may also include repatriation for trial in foreign jurisdictions where the trade/crime is cross boundary. : How is the Department of Trade involved in the fight Qagainst counterfeits and illicit products? The Government is also working on a National Strategy on the war against illicit trade. A draft is already in place A: The State Department for Trade is at the core of the fight against and hopefully a final draft will be in place in October, Counterfeits and Illicit Products. As per Executive Order No. 2018. 1/2018, one of the Mandates of the Department is Co-ordination of the Multi-Agency Task Force on the elimination of Illicit Trade A public outreach programme on the war against illicit and Counterfeits. trade is ongoing. More resources are being mobilized : What are the economic implications of counterfeits to for a major roll out. We hope to succeed in this war and Qtrade and the economy? we call on all Kenyans to assist us.

A: The economic implications of counterfeit trade are frightening. It poses a serious threat to public safety, health and security

25 Big Four Agenda Success Will By Daniel Muasya

albeit with caution. Major oil executives are still not conﬁdent if this rallying of prices will remain for long. Many are still in the ‘lower for longer’ mode and are not ready to be caught unaware by another global oil prices collapse. They are caught in an industry war of ensuring proﬁtability is maintained and grows vs the need to maintain a healthy reserve replacement ratio which can only happen

COVER STORY COVER through continuous sustained capital investments or through M&A activities.

Kenya’s Big Four Agenda In December 2017, President Uhuru Kenyatta launched his development blue print, ‘The Big Four’ for the next four years. The blue print focuses on key basic needs that are critical in uplifting Kenyans’ standard of living of on the path to upper middle-income status by 2030. The four agendas are affordable and decent housing, affordable healthcare, food and nutritional security, and employment creation through manufacturing. These areas are expected to bolster strong inclusive economic growth and the President is determined to ensure that he leaves a strong legacy at the end of his term by ensuring that the agendas succeed.

Historically, the most fundamental defining feature of the industrial revolution Global outlook was that it made possible exponential economic growth at a speed that doubled output every two decades. This in turn When oil prices collapsed in the 3rd radically transformed living standards. The President’s blue print can be equated to Quarter of 2014, fortunes significantly these historical industrial revolutions. Once successful, Kenya will be fully food secure, turned against major oil producing every Kenyan will access Universal Health Care, 500,000 new houses will have been countries as well as frontier countries. constructed and Manufacturing will contribute 20% of the Kenya Gross Domestic Companies changed strategies, slowed Product doubling from the current 9%. investments and focused on turning around profits and managing or cutting costs. Companies also divested from Manufacturing projects that were perceived to have Due to its linkage to so many other sectors in the economy, manufacturing output been high cost and exited from several stimulates more economic activity across society than any other sector. Therefore, exploration frontiers that had several manufacturing will play a very critical role in Kenya’s economic growth and other commitments coming up in the next sectors including the other Big Four agendas. As factory output grows, it will require few years. Kenya, being an exploration more inputs from energy utilities and suppliers and will create job and investment frontier country then, was also affected. opportunities in all the other sectors such as transportation, construction and retail. It Several players exited some of the will also spur growth in services such as finance, among others. exploration blocks awarded to them earlier on by the government and even As the ripple effect is created across the Kenyan economy, one key dilemma will be though the exploration activities in availability of cheap and sustainable source of energy to power the country both in the Northern Kenya continued under the manufacturing sector and domestic consumption. Tullow Oil, Africa Oil Joint Venture (then), activities slowed. Very few other players carried out drilling or seismic tests Oil and Gas production activities in the country. According to U.S. Energy Information Administration, Manufacturing Energy Consumption Survey 2014 Some manufacturers use energy sources as feedstocks— Currently, global oil prices have turned raw materials—in their manufacturing processes in the following ratios. Hydrocarbon around and exploration activities in gas liquids 45%, Natural gas 10%, Coal 9%, Coke and breeze 2%, others 34%. This several parts of the world have resumed shows that hydrocarbon and Natural gas constitute 55% of energy consumed by the US manufacturing industry.

26 Spur Growth In Upstream Sector

Kenya recently made a breakthrough by transporting its first oil from Turkana to Mombasa by road under the Early Oil Pilot Scheme. Whereas this is not a commercial venture, technical success of this project will be a breakthrough for the country. In addition, there has been major progress in discussions around funding the pipeline project that will link the Turkana oil fields to the coast. NEWS REGIONAL

The resulting growth in manufacturing, availability of affordable goods and services, With the global energy mix not growth in labor market, demand in agricultural inputs will create a pull that will projected to change in the next half signiﬁcantly increase the demand for more energy. This will create a need to ensure the century, Hydrocarbon and fossil fuel government retains a favorable reserve replacement ratio for its oil reserves. remains the leading source of energy for manufacturing and other sectors of It’s no doubt that focus on manufacturing as a key agenda presents a prime opportunity the economy. Innovation has helped for the government to upscale its exploration activities and attract more investors in in reducing cost of energy production the Kenya Upstream sector. The demand and the market will be available in the next but not in developing new sources of couple of years. energy that can completely replace oil and natural gas as the prime sources of The writer is the Upstream Finance Manger – Shell International Exploration and Production – energy for heavy industrial, commercial Kenya and manufacturing consumption. There Email – [email protected] has been major campaign and shift towards clean (renewable) energy, but this needs to be scaled up to huge volumes. Most of this shift has only been witnessed in domestic energy consumption.

Kenya case Kenya recently made a breakthrough by transporting its ﬁrst oil from Turkana to Mombasa by road under the Early Oil Pilot Scheme. Whereas this is not a commercial venture, technical success of this project will be a breakthrough for the country. In addition, there has been major progress in discussions around funding the pipeline project that will link the Turkana oil ﬁelds to the coast. In fact, the Kenya government and Tullow Oil have already hired Wood Group to carry out Front End Engineering Design of the pipeline with full oil production of 100,000 barrels per day expected to commence end of 2021.

If completed on time, this project will be of massive boost to the Kenyan manufacturing sector. Cheaper fuel will be available to replace hydro power and imported diesel that have been main sources of energy and have completely crippled the sector due to unsustainable energy bills.

27 1 2 PICTORIAL INDUSTRY PICTORIAL

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4. Total Kenya Managing Director, Olagoke Aluko (Middle) and KPC Managing Director, Joe Sang (Right) fuel a customer’s car at TOTAL Limuru Rd as part of this years’ Customer Service Week Celebrations. Looking on is the service station dealer John Maina. 5. Eng. John Musonik Chief Administrative Secretary, Ministry of Petroleum and mining reads the minister‘s speech during the unveiling of quarter 2 industry report. 6. Vivo Energy Kenya MD Joe Muganda (Left) fuels a matatu during the launch of Shell New fuels. Vivo Energy Kenya has launched its new Shell fuels portfolio, (Shell V-Power, Shell FuelSave Unleaded and Shell FuelSave Diesel), designed for engine efficiency. The new fuels now have DYNAFLEX technology that has been 7 developed to help clean and protect key components in our customers’ engines. Looking on is Lena Munuve, Vivo Energy 1. Representatives of Oil marketing companines during the unveiling Kenya Retail Manager, and Mark Vivo Energy Kenya marketing of quarter 2 industry report at Intercontinental hotel Nairobi. manager. 2. Dr. Daniel Manduku Ag KPA MD (in a blue tie) with PIEA directors 7. Mr. Varun Sharma PIEA director makes a speech during a farewell when they paid him a courtesy at his office in Mombasa. breakfast hosted for immediate former PIEA chair, Ms. Anne- 3. From Left - Consumers Federation of Kenya (COFEK) Secretary Solange Renouard. General, Mr Stephen Mutoro, PIEA General Manager, Wanjiku Manyara and other COFEK representatives when the team visited PIEA for a meeting.

28 8 9 PICTORIAL TRAINING PICTORIAL

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8. R - L Hass petroleum chief operationg officer, Mr. Solomon Osundwa cuts a ribbon during the commissioning of Hass Petroleum Juja Road petrol station. 9. A team of Public Health Researchers from the University of Liverpool, UK and Moi University, Eldoret, accompanied by representatives of the Global LPG Partnership joined the Petroleum Institute of East Africa to meet Mr Andrew Kamau, the Permanent Secretary, State Department of Petroleum (Right) in Nairobi earlier in the year. 10. Francois–Xavier Ruenes, the Total Kenya Commercial Manager -Retail and Lubricants hands over sponsorship of the inspection ramp for the CBA Africa Concours d’Elegance to Peter Wanday, the Chairman of the Alfa Romeo Owners Club, looking on is 14 Dr. Macharia Irungu, Total Kenya Strategy and Corporate Affairs modern ablution blocks for the school which has a population of Director. The club has organized the annual event for the past 48 over 2,000 pupils at a cost of KES 11Million. years. 12. Total Kenya staff led by Irene Muinde, Total Kenya Human 11. Centre: Tristar Group CEO, Eugene Mayne cuts the ribbon to unveil Resources Manager (second row- 4th left) hands over a one of the ablution blocks built by the Group for Kiserian Primary sponsorship cheque to SOS Children’s Village for four houses School. On his left is Samuel Seki, the County Executive Member Nairobi, Kisumu & Mombasa. Staff also donated clothes, books & in Charge of Education, Kajiado County and Joseph Wafula, the toys to the village. Principal Economist at the Ministry of Petroleum and Mining. Tristar 13. Participants of a recent service station management course at the Group renovated the school’s assembly grounds to make them school of petroleum studies. playable and passable during the rainy season and built three 14. Participants of Supply planning optimization in the oil and gas sector workshop in a group photo. 29 Petroleum Authority of Uganda opens UNOC, CNOOC 2019 suppliers to start joint oil registration exploration in 2019

he Petroleum Authority of Uganda, the body charged ganda National Oil Company Ltd signed a with monitoring and regulating oil and gas activities in Memorandum of Understanding (MoU) with China the country, has opened the 2019 registration for the National Offshore Oil Company (CNOOC) to TNational Supplier Database. Uwork together to start exploration in the Albertine Companies providing a range of services, from catering, clearing Graben.

REGIONAL NEWS REGIONAL and forwarding, logistics, to security, are listed on the roster for The MoU was signed by Dr. Josephine Wapakabulo, the easy access and consideration during procurement activities. Chief Executive Ofﬁcer (CEO) UNOC and Fang Zhi, the While speaking at the launch of the registration process, Ernest Chairman of CNOOC International in Beijing late September Rubondo, the authority’s executive director said the number of and was witnessed by President Yoweri Kaguta Museveni, companies registered on the database has increased from 513 Hon. Sam Kuteesa, Minister of Foreign Affairs and Mr. in 2017 to 1,712 in 2018. William Byaruhanga the Attorney General. “This is expected to increase even more in 2019,” Mr Rubondo said. The MoU indicates that UNOC and CNOOC will work together to develop a block in the Albertine Graben and the two entities intend to start the process of accessing the identiﬁed block as soon as possible.

Projections show that Cnooc, Tullow, The purpose of this cooperation is to ensure that more and Total – the three joint venture crude oil is discovered to support the projected production profile of already discovered resources that are under partners licenced to develop Uganda’s development as well as create an avenue for UNOC to oil resources – will invest approximately grow its exploration capabilities and begin its journey Shs22 trillion ($7b) in activities leading towards a fully-fledged oil company able to perform to production. This is in addition to the operatorship roles. $4bn to be spent on constructing an It is the intention of the two companies to start the process oil refinery and $3.5bn on a crude oil of applying for the identified block in October and start pipeline to the Tanzanian coast. exploration activities as soon as the Ministry of Energy and Mineral Development (MEMD) grants them a license.

It is hoped that the licensing process will not take long He added that the country’s oil and gas industry is “at a and it is planned that the planned activities should start critical stage” with the ongoing reviews of technical front end early next year. “UNOC and CNOOC plan to grow their engineering designs for the Tilenga and Kingfisher oil projects partnership into other operations in and outside of Uganda. and designs for the East African Crude Oil Export Pipeline. UNOC will rely heavily on CNOOC’s experience as a “These studies involved an extensive engineering and project national oil company to grow its capabilities and expertise,” cost valuation process to plan for the required facilities and the statement reads in part. describe the project economics,” he said. President Yoweri Kaguta Museveni was pleased with “The studies also defined the specific nature, quality and the step UNOC and CNOOC were taking in furthering quantities of goods and services required for these projects, exploration in the Albertine Graben. Dr Josephine together with the possible sources including those that will be Wapakabulo indicated that UNOC is happy to continue sourced from Uganda.” building on a very firm and longstanding relationship between the People’s Republic of China and the Republic Projections show that Cnooc, Tullow, and Total – the three joint of Uganda. venture partners licenced to develop Uganda’s oil resources – will invest approximately Shs22 trillion ($7b) in activities leading She confirmed UNOC’s commitment to ensuring to production. This is in addition to the $4bn to be spent on sustainable as well commercial exploitation of Uganda’s constructing an oil refinery and $3.5bn on a crude oil pipeline to Crude oil and gas sector. CNOOC, confirmed their the Tanzanian coast. continued commitment to Uganda and working with UNOC to ensure national participation as well as supporting Mr Rubondo also asked suppliers who registered in earlier UNOC on its journey to operatorship. rounds to update their contact details as proof that they are The MoU will be followed by further commercial agreements active or else they will be removed after three years. and it is hoped that these and all relevant approvals will be The database was rolled out in July last year. The authority concluded before end of this year so exploration starts in expects to develop it into a centralised joint qualification and 2019. e-marketplace for all oil related procurement.

30 Ethiopia’s Nascent Oil & Gas Gathering Pace thiopia’s nascent energy industry Since Abiy took ofﬁce in April, the ruling party has announced plans to open up state is gathering pace, with a unit of monopolies including airlines and telecommunications to foreign investors, while oil- China Poly Group Corp. starting and gas development, planned for years, is gearing up. Etest output of crude oil in a volatile border region and the government Starting Pipeline estimating initial annual income of $1.2 billion when gas exports begin from the Ethiopia plans a natural gas pipeline from the Ogaden to a port complex on the Red area. Sea in neighboring Djibouti. Abiy said on Wednesday that construction will start in September and exports will begin in 2021. Oil and gas income will be a major boost Poly-GCL Petroleum Group, a partnership between China Poly and closely held Hong to the landlocked Horn of Africa nation’s Kong-based Golden Concord Group Ltd., signed ﬁve production-sharing agreements economy, bringing in much- with Ethiopia in 2013 needed foreign exchange as to explore in the Ogaden.

well as saving on imported fuels, NEWS REGIONAL Prime Minister Abiy Ahmed said Oil and gas income will be a major boost to the late Wednesday in a televised landlocked Horn of Africa nation’s economy, After Abiy met Somali address. The United Arab bringing in much-needed foreign exchange as well President Mohamed Emirates this month pledged $3 as saving on imported fuels, Prime Minister Abiy Abdullahi Mohamed billion in aid and investments to in mid-June, Ethiopia. Ahmed said late Wednesday in a televised address. they announced they’d develop Earnings from estimated natural four seaports in gas reserves of 8 trillion cubic feet from unspecified locations the Ogaden Basin may be as much as to serve the Red Sea and Indian Ocean as well as highways linking the two countries. $7 billion a year once it can produce at full capacity, Abiy was cited by the state- “We discussed how this oil goes to their direction and comes to our direction,” Abiy owned Ethiopian Herald as saying on said in his Wednesday address. Abdisaid Ali, national security adviser to Somalia’s Thursday. Beijing-based China Poly that president, and Nafisa Santur, senior political adviser to the country’s prime minister, day began crude testing in three areas of didn’t immediately respond to Bloomberg requests for comment on the ports. the Hilala and Calub localities of Ogaden, which borders war-torn Somalia. Abiy also talked about increasing security cooperation with Somalia’s federal Ethiopia’s economy -- the fastest- government, referring to forces that may try to halt the project in the disputed area. growing on the continent -- is state- In April 2007, an Ethiopian rebel group, the Ogaden National Liberation Front, attacked planned and focused mostly on a site operated by China’s Zhongyuan Petroleum Exploration Bureau in the area, killing agriculture, export-led manufacturing nine Chinese workers and 65 Ethiopians. The insurgents have been fighting for self- and large-scale infrastructure projects. determination since 1984. Expression of Interest for Tanzania – Uganda gas pipeline out

he Tanzania Petroleum Apart from an approximate 200-kilometre Development Corporation section between Dar es Salaam and (TPDC) has issued an expression Tanga, the route is expected to parallel Much of the offshore Tof interest document for a the 1445-kilometre path of the East feasibility study on the construction of gas will underpin Africa Oil Pipeline, which will transport a gas pipeline between Tanzania and liquefied natural gas waxy oil from Hoima on the shore of Lake Uganda. developments but Albert in north-west Uganda to Tanga. Responses to the EOI would need to be the remainder could Currently, gas from the Mnazi Bay field in submitted and tender documents filed by find a ready market in southern Tanzania is transported to Dar in October, targeting contract award on 9 Tanzania or possibly es Salaam by a China-funded and -built November. 542-kilometre pipeline. Uganda. This ambitious pipeline would run from Some 57 trillion cubic feet of recoverable Dar es Salaam to Uganda via the port of gas has been found in Tanzania to date, Tanga on the Indian Ocean, Mwanza on Commission Summit held in Kampala mostly in its southern offshore waters, the southern shore of Lake Victoria and from August 21-23. The summit which although some is held in a clutch of the Kagera region of Tanzania adjacent was led by Tanzania’s Foreign Minister, onshore finds in the north. to the border with Uganda. Augustine Mahinga and Uganda’s Minister of Energy, Irene Muloni, was also Much of the offshore gas will underpin Tanzania and Uganda signed an attended by Uganda’s Ambassador to liquefied natural gas developments but agreement to construct a natural gas Tanzania, Richard Kabonero and officials the remainder could find a ready market pipeline in August 2018. This took from ministries of Defence, Energy, Trade in Tanzania or possibly Uganda. place after a three-day Joint Permanent and Agriculture.

31 Anadarko targets first half of 2019 for Mozambique LNG Decision nadarko Petroleum expects it achieved significant advancements on we expect a Final Investment Decision in to make a Final Investment the Mozambique LNG project, including the first half of 2019.” Decision (FID) for its new heads of agreements and expected AMozambique LNG project in the cost reductions, with an anticipated Final Additionally, the company and its first half of 2019. Investment Decision (FID) during the first contractors expect to realize substantial half of 2019. cost savings, with Anadarko now The Anadarko-operated Mozambique Progress continues on converting the expecting to deliver the first two onshore LNG project will be Mozambique’s first FID target off-take volume from non- liquefaction trains with 12.88 million onshore LNG development, initially binding commitments to long-term SPAs, tonnes per annum (MTPA) capacity for consisting of two LNG trains with total Anadarko stated. less than $600 per tonne. REGIONAL NEWS REGIONAL nameplate capacity of 12.88 MTPA to support the development of the Golfinho/ Al Walker, Anadarko Chairman, President Aandarko also said that Atum fields located entirely within and CEO, said: “Our Mozambique LNG recommendations for award of the Offshore Area 1. project has made excellent progress, and offshore contractor and equipment providers are progressing through The approval from the government of internal, co-venturer and Mozambique for the Golfinho/Atum field Government of Mozambique development plan was received in March approval. 2018. Activities at the Afungi onshore Following the approval, during the site, including resettlement, second quarter of this year, Anadarko continue to ramp up as and its Area 1 co-venturers signed a Anadarko positions the Heads of Agreement with Tokyo Gas and onshore area for construction. Centrica for long-term LNG off-take of Subsequent to quarter end, 2.6 MTPA. Area 4 joined the Anadarko-led Image courtesy of Anadarko Resettlement project as a 50% In its report for the second quarter of 2018 participant. releases on Tuesday, Anadarko said that

Eni marks Coral South floating LNG unit offshore Mozambique

talian oil company Eni has marked the financial close for a total amount of around $4.7 billion for the Coral South FLNG multi- beginning of construction of the hull sourced project financing in December 2017. for Coral South floating LNG (FLNG) Iunit for a project located offshore Announcing the beginning of construction on Thursday, Eni said that the hull is designed Mozambique. to accommodate the storage facilities for all the substances that will be processed and produced in the floating liquefaction plant, mainly Liquefied Natural Gas (LNG) and At the presence of Mozambique’s condensates. In addition to the storage tanks, some of the electrical, instrumentation Minister of Mineral Resources and and mechanical rooms, as well as all maritime systems related to cargo management, Energy, Ernesto Max Tonela, Eni and will be located in the hull. its Area 4 partners held on Thursday at Geoje Island, South Korea, the “First The FLNG construction started with the steel cut for the ship’s turret, which took place Steel Cut” ceremony that marks the in March this year in Singapore. beginning of the construction of the hull The other main component of the FLNG, the topside modules, will also be built in South of Coral South’s FLNG vessel. Korea at the Samsung Heavy Industries shipyards and the construction is planned to start end of this year. Eni said that the FLNG is expected to be completed by the end of The ceremony took place just 15 2021 and first gas is expected in 2022. months after Coral South Project’s Final Investment Decision (FID), highlighting Eni is the delegated operator for the Coral South FLNG project, the first project to the commitment of Area 4 Partners to monetize the world class gas resources discovered in Area 4, Mozambique. The Area start LNG production by 2022. 4 participants are Eni (25%), ExxonMobil (25%), CNPC (20%), Empresa Nacional de Hidrocarbonetos E.P. (10%), Kogas (10%) and Galp Energia (10%). To remind, Eni sanctioned its Coral South project in June 2017 and achieved

32 Energy efficiency and the evolution of the light bulb By Prakriti Raghavan

technologies like Most lighting controls – including a saving up to 90%. solid state switches, motion-detecting switches, CosmolSol Limited is an Indian origin, occupancy sensors, sound sensors, wireless Kenya-based company that represents controls, and dimmers. From the last decade, a unique, transformative combination of LEDs have gained tremendous traction across the minds and talents to harness innovations globe due to efﬁciency, longevity and performance. to empower enterprises and business. Starting from street lights, trafﬁc lights, TV’s A new entrant to African Market, the

computes, phones, office & home lighting etc… company is committed to bring the best NEWS REGIONAL they are everywhere. of technologies from IoT, AI, Embedded Systems, Big Data Analytics and Power Drawbacks LED emits 90% of the heat from electronics that can bring the difference its input power and provides only 10% as light. in energy space. Proper grade fixtures helps for accurate thermal n 22nd October 1879 sync. Costing plays a vital role in the selection of Prakriti Raghavan is the Executive Director, the world applauded LED lightings. Generally higher costs LEDs have CosmolSol Limited. Email; corporate@ Thomas Alva Edison perfect heat sync and universal drivers. Till the comsolltd.com www.comsolltd.com for his greatest advent of LED, the light output was measured by O input energy in Watts. With LEDs, it has shifted to invention of Incandescent bulb. Before his time, many measure the light output in actual illumination or Lumens. scientists had experimented LED lighting is a on electric bulb but Edison Application in Smart Building enables various became the hallmark. He is just electronics and electrical components into one promising technology not recognized for his invention system which can monitor, control and value add as it addresses of an object but respected as efficiency into the system and makes it intelligent. greater economic and remover of darkness. In typical commercial or office spaces, the light will be on from 6 am till 8pm which are consuming commercial viability. There was rapid 100% of the energy irrespective of the day light Practically, the life of commercialization of and occupancy. the LED is infinite. incandescent bulbs to replace candles and kerosene With smart connected lighting system, the sensors lamps. This resulted in more are interfaced which recognises the occupancy experiments and fluorescent and the day light bulb evolved. The bulb made harvesting can be its first public appearance in utilised in blend with 1939 World’s Fair New York. artificial lighting. The As the world has increasingly wireless technology industrialized and urbanized, eradicates human the demand for energy has intervention of grown exponentially with switching on/off demand exceeding supply. lights and advance This situation opened the way dimming technology to the concept of “energy triggers automatic efficiency” and has recently dimming during resulted to the new born of non-occupancy or revolutionary technology called sunlight. The system Light Emitting Diodes or LED. not only provides uniformity in lighting LED lighting is a promising but also efficient and technology as it addresses effective lighting with greater economic and commercial viability. Practically, the life of the LED is infinite. However, due to technological implementation, the life gets limited but is still way longer than CFL or incandescent bulbs. The time shift from Incandescent to Florescent was sluggish not an exact replacement due to functional incompatibilities with advanced

33 Innogrative Solutions for Industrial Valve Rehabilitation By Zoher Pirbhai

Burhani Engineers who are the pioneers of providing innogrative solutions for the engineering sector, are ready with their new Innogration Hub offering valve testing and rehabilitation. The main objective of setting up a valve rehabilitation

FEATURE hub is to provide effective solutions for all kinds of valve repairs irrespective of the size, type and class ratings. This includes machining, assembly & disassembly, hydro testing, pneumatic testing, functional testing, pressure limit testing, seat -disc lapping, valve parts changing, actuator modiﬁcations for safety, isolation and control valves.

This reafﬁrms our commitment to our customers that we take smart risks, listen, understand and learn from each other as we continually raise the bar of our performance to deliver real value.

The Burhani Valves Testing and Rehabilitation workshop is equipped with world class equipment, machinery and combined with a dedicated team of technicians who have a decade of experience to provide best solutions for all kinds of valves. When a valve is received for testing and rehabilitation, a detailed condition assessment and repair plan is documented. This report is stored and is accessible in our data management system. Customers will receive an electronic certificate for each valve, incorporating hat happens when an industrial valve malfunctions? Most full details of the valves’ service activities along with the industries would prefer to buy a new valve. compliance to testing standards. In such a scenario, it will take a lead time of up to 24 weeks from machining, assembly, testing, painting, packing, Besides the rehabilitation, we are ready to provide W onsite solutions and technical training on valve dispatching to the customer and installation at site. In addition, it results in operational downtime for the industry, under-utilisation of resources, maintenance. Supporting customer education by customer delivery pressure and the additional investment of replacing a offering a broad range of training tools and courses new valve. aimed at improving valve performance. Time, engineering and cost invested are the major risks that customers have to cope with due to valve malfunction at site. Rehabilitating valves from processing plants will In Kenya, this situation can be ascertained by visiting the backyards of fundamentally drive significant operational efficiencies, most of the process industries. They have a huge pile stock of valves that higher profitability and business growth. have been discarded as scrap. Rehabilitation of valves is a solution to minimise the above risk that The consequent increase in asset utilisation will result industries face. The cost, time and engineering incurred to rehabilitate a in significant financial improvement in production valve is far lower than the expenses of a new valve. operations. In conclusion, Burhani Engineers prides itself on delivering the industry’s best innogrative solutions that will have a positive impact on their capital and operational expenditure. Besides the rehabilitation, we are ready Burhani Engineers Limited (BEL) is local Kenyan engineering company, with offices in Nairobi, Mombasa to provide onsite solutions and technical - Kenya and Dar-es-Salaam - Tanzania. We primarily training on valve maintenance. Supporting focus on providing innogrative engineering solutions in customer education by offering a broad East and Central Africa with customised solutions in the range of training tools and courses aimed at engineering disciplines of Electrical, Instrumentation, Mechanical and Civil. improving valve performance. Zoher Pirbhai is the Managing Director, Burhani Engineers. Email: [email protected]

34 Petroleum Taxes

Import Excise Duty VAT Road Mainten. Petroleum Import Decl. Remission Adulteration Duty Levy Devel. Levy Form Kshs/Litre Levy Motor Spirit (Gasoline) - 19.505 8% 18.00 0.40 2.25% 0.45 - Regular Motor Spirit (Gasoline) - 19.895 8% 18.00 0.40 2.25% 0.45 - Premium Aviation Spirit - 19.895 8% - 0.40 2.25% 0.45 - Spirit Type Jet Fuel - 19.895 8% - 0.40 2.25% 0.45 - STATISTICS Special Boiling Point & - 8.500 8% - - 2.25% 0.30 - White Spirit Other Light Oils and - 8.500 8% - - 2.25% 0.30 - Preparations Partly reﬁned - 1.450 8% - - 2.25% 0.30 - (including topped crudes) Kerosene type Jet - 5.755 8% - 0.40 2.25% 0.45 - Fuel Illuminating Kerosene - 7.250 8% - 0.40 2.25% 0.45 18 (IK) Other Medium oils - 5.300 8% - 0.40 2.25% 0.30 - and preparations Gas Oil (automotive, - 10.305 8% 18.00 0.40 2.25% 0.30 - light, amber for high speed engines). Diesel Oil (ind - 3.700 8% - 0.40 2.25% 0.30 - heavy,black for low speed marine and stationery engines). Other Gas Oils - 6.300 8% - 0.40 2.25% 0.30 - Residual Fuel oils 125 - 0.300 16% - 0.40 2.25% 0.30 - cst. Residual Fuel oils 180 - 0.600 16% - 0.40 2.25% 0.30 - cst. Residual Fuel oils 280 - 0.600 16% - 0.40 2.25% 0.30 - cst. Other residual fuels - 0.600 16% - 0.40 2.25% 0.30 - Lubricating oils 25% - 16% - - 2.25% - Lubricating greases 25% - 16% - - 2.25% - Batching oils 25% - 16% - - 2.25% - Butanes (Petroleum - - - - 0.40 2.25% - gases) Petroleum Bitumen 10% - 16% - 0.40 2.25% - Bituminous or oil 10% - 16% - 0.40 2.25% - shale and tar sands Bituminous mixures 10% - 16% - 0.40 2.25% -

35 Kenya Petroleum Sales

Q1 RESULTS % Change Jan-March Compared to Products 2017 Jan-March 2017 Jan-June 2016 2018 same period 2018 Avgas 2,007 537 466 -15% 761

STATISTICS Jet A-1 879,243 178,399 215,537 17% 413,555 Premium Gasoline 1,711,426 415,247 453,564 8% 787,901 Regular Gasoline - - Kerosene 533,794 142,646 118,763 -20% 269,062 Gas Oil 2,509,585 622,874 642,419 3% 1,249,499 Industrial Diesel 2,155 487 20 -2344% 418 Fuel Oils 603,843 145,866 166,033 12% 154,700 Bitumen* 1,770 117 171 32% - Lubricants 52,402 13,793 13,692 -1% 26,822 Greases* 2 - - 13 TOTAL 6,298,245 1,519,966 1,610,664 6% 2,902,731

Units in M3 * Units in Metric tonnes

GALANA 1.7% ASTROL 0.4% STABEX 1.4% BACHULAL Market 0.4% FOSSIL 1.4% POPATLAL (K) LTD DALBIT 1.2% MSOIL 0.4% Share ORYX 1.2% FUTURES 0.4% BANODA 0.3% Overal Market Share(Including Exports) Engen 1.1% April - June 2018 CITY OIL 1.1% RANWAY 0.3% Vivo 14.6% TRISTAR 0.9% OIL ENERGY 0.3% Total 13.2% AINUSHAMSHI 0.9% KENCOR 0.3% Kenol Kobil 13.2% OLYMPIC 0.8% OCEAN ENERGY 0.2% Libya Oil 5.3% ONE PETROLEUM 0.8% GASLINE 0.2% GULF 5.1% ASPAM 0.7% TOWBA 0.2% NOCK 5.0% RIVAPET 0.7% GLOBAL 0.2% PETRO 4.5% EAGOL 0.7% BRAINFIELD 0.2% HASS 3.7% LUQMAN 0.7% PETROCAM 0.2% Bakri 2.7% RH DEVANI 0.7% TIBA 0.2% GAPCO 2.6% MOGAS 0.6% SAVANNAH ENERGY 0.1% ROYAL 2.5% AXON 0.5% AFRO 0.1% TEXAS 2.3% FINE JET 0.5% OTHERS 1.1% TOSHA 2.0% LEXO 0.5% TOTAL 100.0%

36 HALF YEAR RESULTS Q2 RESULTS Q2 vrs Q1 2018 % Change % Change % Change Compared to Jan-June Jan-June Compared to April-June Compared to April-June 2017 % Change same period 2017 2018 same period 2018 same period 2017 2018 2018 20% 955 1,643 42% 418 1,177 64% 60%

-6% 389,138 405,302 4% 210,739 189,764 -11% -14% STATISTICS 6% 836,411 896,723 7% 421,164 443,159 5% -2% - - - - 6% 286,093 223,136 -28% 143,447 104,374 -37% -14% -1% 1,240,340 1,282,638 3% 617,466 640,219 4% 0% 85% 2,807 20 -13984% 2,320 - 53% 326,214 251,686 -30% 180,348 85,652 -111% -94% 100% 1,125 429 -162% 1,008 258 -290% 34% 0% 26,749 26,041 -3% 12,956 12,349 -5% -11% - 606 100% - 606 100% 100% 7% 3,109,832 3,088,223 -1% 1,589,866 1,477,559 -8% -9%

Kenya Petroleum Sales Market Share LEXO 0.6% BRAINFIELD 0.1% April - June 2018 RIVAPET 0.6% PRIME REGIONAL 0.1% VIVO 19.5% ROYAL 0.6% JAGUAR 0.1% Total 16.2% AINUSHAMSHI 0.6% HELLER 0.1% Kenol KOBIL 13.8% OLYMPIC 0.5% OCEAN ENERGY 0.1% Libya Oil 7.0% ASTROL 0.5% GLOBAL 0.1% NOCK 6.7% BACHULAL GUUL 0.1% 0.5% GULF 5.2% POPATLAL (K) LTD FINE JET 0.1% PETRO 3.7% LUQMAN 0.4% HASHI 0.1% Bakri 2.8% MOGAS 0.3% OTHERS 0.2% GAPCO 2.6% KENCOR 0.3% TOTAL 100% HASS 2.1% FUTURES 0.3% Lubricants Market Share TOSHA 1.8% STABEX 0.3% April - June 2018 GALANA 1.6% TOWBA 0.2% VIVO 39.8% TEXAS 1.5% PETROCAM 0.2% Total 36.4% Engen 1.5% SAVANNAH ENERGY 0.2% Libya Oil 11.4% ORYX 1.3% Amana 0.2% KKOBIL 10.3% ONE PETROLEUM 1.1% TRISTAR 0.2% NOCK 0.9% DALBIT 1.0% PERFORMANCE FUTURES 0.7% 0.2% ASPAM 0.7% PARTS HASS 0.3% FOSSIL 0.7% TIBA 0.2% Engen 0.3% EAGOL 0.6% Oilcom 0.2% AINUSHAMSHI 0.1% RH DEVANI 0.6% AXON 0.1% TOTAL 100%

37 SECTOR SHARE Sector Sales April-June 2018

Civil Aviation Market Share EAGOL 0.4% DALBIT 1.6% Company Percentage MOGAS 0.4% AINUSHAMSHI 1.4% Kkobil 47.5% Amana 0.4% FUTURES 1.1% Bakri 18.1% TIBA 0.3% Bakri 0.8% GULF 13.7% GAPCO 0.3% PERFORMANCE PARTS 0.7% STATISTICS STATISTICS Libya Oil 12.4% ORYX 0.3% TRISTAR 0.7% VIVO 3.8% OLYMPIC 0.3% PRIME REGIONAL 0.4% Total 2.2% ASPAM 0.3% GLOBAL 0.4% HASS 1.2% AXON 0.3% MOGAS 0.3% FINE JET 0.6% BRAINFIELD 0.3% BACHULAL POPATLAL 0.3% HELLER 0.3% Oilcom 0.2% (K) LTD TRISTAR 0.1% TEXAS 0.1% JAGUAR 0.2% TOTAL 100.0% HELLER 0.1% HAMMEX 0.2% OCEAN ENERGY 0.1% BANODA 0.2% Retail Outlets Market Share EON ENERGY 0.1% Oilcom 0.2% VIVO 28.5% HASHI 0.1% OCEAN ENERGY 0.2% Total 22.5% TOTAL 100.0% EON ENERGY 0.2% KKOBIL 10.0% CITY OIL 0.2% NOCK 8.0% Resellers Market Share LUQMAN 0.1% Libya Oil 6.9% GAPCO 10.4% HASHI 0.1% PETRO 4.1% Total 10.2% LEXO 0.1% GULF 2.7% PETRO 7.7% Amana 0.1% GALANA 1.4% TEXAS 6.2% TOTAL 100.00% TOSHA 1.3% NOCK 6.1% LEXO 1.3% VIVO 5.2% Top Industry Consumers Engen 1.2% TOSHA 4.9% Retail Outlets 46.8% ASTROL 1.1% ORYX 4.7% Reseller 23.5% RIVAPET 1.1% ONE PETROLEUM 4.6% Civial Aviation 12.7% LUQMAN 0.8% Engen 4.2% Manufacturing 5.8% Transport & BACHULAL POPATLAL HASS 3.9% 2.2% 0.8% Communication (K) LTD Libya Oil 3.5% Building & Construction 1.8% HASS 0.7% GALANA 3.2% Energy Production 1.1% KENCOR 0.7% KKOBIL 2.9% Agriculture 0.6% Bakri 0.6% FOSSIL 2.8% Mining 0.4% STABEX 0.5% ROYAL 2.5% Government 0.4% AINUSHAMSHI 0.5% ASPAM 2.5% Tourism 0.1% TOWBA 0.5% GULF 1.9% Military 0.1% PETROCAM 0.5% EAGOL 1.7% Other Comercial 4.6% SAVANNAH ENERGY 0.4% OLYMPIC 1.7% TOTAL 100.0%

38 NAIROBI PUMP PRICES

MONTHS Super Petrol 2017 Super petrol -2016 Super petrol -2015 Automotive Diesel 2017 January 96.01 88.64 92.88 84.23 February 100.27 86.50 84.71 89.26 March 101.05 85.58 89.46 90.04 April 98 80.71 89.35 88.62 May 99.59 84.25 92.89 88.05 June 98.73 86.17 97.28 86.89

July 97.1 92.23 98.59 84.46 STATISTICS August 96.08 95.13 102.65 85.86 September 98.30 91.56 102.65 86.86 October 101.67 94.94 93.29 88.71

November 102.7 94.2 90.46 92.41 December 104.7 94.2 90.06 92.44

MONTHS Automotive Automotive Kerosene 2017 Kerosene-2016 Kerosene-2015 Diesel-2016 Diesel-2015 January 76.7 83.35 63.44 46.13 65.59 February 67.88 75.52 67.19 39.62 52.40 March 65.70 76.20 67.96 42.15 55.75 April 66.23 77.48 64.38 43.96 57.21 May 70.37 79.34 65.28 46.98 59.24 June 73.71 83.31 65.35 58.04 61.78 July 83.24 84.56 62.56 61.45 62.74 August 84.51 83.35 63.42 62.58 57.98 September 82.12 79.99 64.36 58.71 52.55 October 82.17 82.43 66.88 62.16 56.04 November 87.22 79.66 71.23 63.56 54.81 December 87.22 78.51 71.41 63.56 53.27

Nairobi Diesel Pump Prices 120 Super Petrol 2017 100 80 Automotive Diesel 2017 60 40 Super petrol-2016 20 2017 Automotive Diesel-2016 0 Super petrol-2015 2017 2016 Automotive Diesel-2015

uper pe Nairobi Super Petrol Pump 2015Price 2017 2016 omo2017 2016 2015 120 100 80 60 40

PUMP PRICE PUMP 20 0

Month

Super Petrol 2017 Super petrol-2016 Super petrol-2015

39 PUMP PRICES Maximum pump prices (15th September to 14th October 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 114.15 116.79 117.25 118.26 118.25 Automotive Diesel 105.5 108.12 108.81 109.81 109.81 Kerosene 105.78 108.41 109.1 110.09 110.09 Maximum pump prices (15th August to 14th Septmber 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 124.49 127.8 128.46 129.64 129.71

STATISTICS STATISTICS Automotive Diesel 111.78 115.08 115.97 117.15 117.22 Kerosene 94.61 97.41 98.22 99.29 99.29 Maximum pump prices (15th July to 14th August 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 108.9 112.2 112.87 114.05 114.12 Automotive Diesel 99.96 103.25 104.14 105.32 105.39 Kerosene 82.94 85.73 86.54 87.61 87.61 Maximum pump prices (15th June to 14th July 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 105.51 108.81 107.86 109.05 109.11 Automotive Diesel 100.31 103.6 99.54 100.72 100.79 Kerosene 81.31 84.1 79.05 80.12 80.12 Maximum pump prices (15th May to 14th June 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 103.88 107.17 107.86 108.71 108.78 Automotive Diesel 95.35 98.64 99.54 99.94 100.01 Kerosene 75.44 78.22 79.05 78.63 78.62 Maximum pump prices (15th April to 14th May 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 103.54 106.83 107.53 110.67 110.74 Automotive Diesel 94.57 97.86 98.76 105.67 105.74 Kerosene 73.94 76.72 77.56 85.99 85.98 Maximum pump prices (15th March 2017 to 14th April 2018) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 100.89 104.7 104.88 106.06 106.13 Automotive Diesel 89.17 92.44 93.66 94.54 94.61 Kerosene 68.65 71.42 72.77 73.34 73.34 Maximum pump prices (15th Novemebr 2017 to 14th December 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 99.42 102.7 103.42 104.6 104.67 Automotive Diesel 89.13 92.41 93.32 94.51 94.57 Kerosene 68.46 71.23 72 73.15 73.15 Maximum pump prices (15th October 2017 to 14th Novemeber 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 98.39 101.67 102.39 103.57 103.64 Automotive Diesel 85.44 88.71 89.64 90.82 90.89 Kerosene 63.41 66.18 67.04 68.12 68.11 Maximum pump prices (15th september 2017 to 14th october 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 95.08 98.3 99.04 100.22 100.29 Automotive Diesel 83.63 86.86 89.04 88.98 89.04 Kerosene 61.63 61.63 66.3 66.3 66.3

40 Maximum pump prices (15th August 2017 to 14th September 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 92.86 96.08 96.83 98.01 98.09 Automotive Diesel 82.63 85.86 86.8 87.98 88.04 Kerosene 60.69 63.42 64.3 65.37 65.37 Maximum pump prices (15th July 2017 to 14th August 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 93.87 97.1 97.84 99.02 99.09 Automotive Diesel 81.24 84.46 85.41 86.59 86.66 Kerosene 59.83 62.56 63.44 64.51 64.51

Maximum pump prices (15th June 2017 to 14th July 2017) STATISTICS PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 95.47 98.73 99.47 100.65 100.72 Automotive Diesel 83.63 86.89 87.83 89.01 89.08 Kerosene 62.29 65.35 65.92 66.99 66.98 Maximum pump prices (15th April 2017 to 14th June 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 96.32 99.59 100.32 101.5 101.57 Automotive Diesel 84.79 88.05 88.95 90.16 90.23 Kerosene 62.52 65.28 66.15 67.22 67.22 Maximum pump prices (15th March 2017 to 14th April 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 97.63 101.05 101.78 102.96 103.03 Automotive Diesel 87.04 90.44 91.36 92.54 92.61 Kerosene 65.11 67.9 68.83 69.9 69.88 Maximum pump prices (15th February 2017 to 14th March 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 96.85 100.27 101 102.18 102.25 Automotive Diesel 85.87 89.26 90.19 91.38 91.44 Kerosene 64.64 67.19 68.06 69.13 69.12 Maximum pump prices (15th January 2017 to 14th February 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 92.6 96.01 96.76 97.94 98.01 Automotive Diesel 80.53 84.23 85.18 86.36 86.43 Kerosene 60.6 63.44 64.32 65.39 65.39 Maximum pump prices (15th December 2016 to 14th January 2017) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 90.8 94.2 94.96 96.14 96.21 Automotive Diesel 83.83 87.22 88.16 89.34 89.4 Kerosene 67.1 63.56 64.43 65.8 65.5 Maximum pump prices (15th November 2016 to 14th December 2016) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 91.53 94.94 95.7 96.88 96.95 Automotive Diesel 78.79 82.17 83.12 84.3 84.37 Kerosene 59.31 62.16 63.04 64.11 64.1 Maximum pump prices (15th October 2016 to 14th November 2016) PRODUCT MOMBASA NAIROBI NAKURU ELDORET KISUMU Super Petrol 88.16 91.56 92.33 93.51 93.58 Automotive Diesel 78.74 82.12 83.07 84.25 84.32 Kerosene 55.87 58.71 59.6 60.67 60.62

41 SGS Fuel Marking and Tracing Service - Kenya SGS Fuel Marking and Tracing Service - Kenya

Executive Summary for July - September 2018

1. Sampling and Testing STATISTICS

The tables below indicate the number of sites tested during the month of July - September and the number of positive sites found.

Table 1: Summary of sites sampled and tested per province for Kerosene Marker

Sites Tested Sites Found Positive Province Independent Company Total Independent Company Central 35 79 114 2 0 1.75% Coast 12 29 41 6 0 14.63% Eastern 39 86 125 2 0 1.60% Nairobi 27 61 88 18 0 20.45% North Eastern 6 4 10 0 0 0.00% Nyanza 39 25 64 2 1 4.69% Rift Valley 80 124 204 4 0 1.96% Western 41 38 79 2 0 2.53% 279 446 725 36 1 5.10%

Table 2: Summary of sites sampled and tested per province for Export Marker

Sites Tested Sites Found Positive Province Independent Company Total Independent Company Central 35 79 114 2 0 1.75% Coast 12 29 41 4 0 9.76% Eastern 39 86 125 0 0 10.00% Nairobi 27 61 88 5 0 5.68% North Eastern 6 4 10 0 0 0.00% Nyanza 39 25 64 3 0 4.69% Rift Valley 80 124 204 2 0 0.98% Western 41 38 79 1 0 1.27% 279 446 725 17 0 2.34%

42 CRUDE OIL TREND

Crude Oil Analysis Month -2016 Mean Exchange Rates (KES/US$) Crude Prices August 101.80 44.87 September 101.50 45.04 October 101.20 49.30 November 101.83 45.26 STATISTICS December 102.45 52.26 17-Jan 103.99 53.59 17-Feb 103.55 54.35 17-Mar 102.97 50.90 17-Apr 103.11 52.16 17-May 103.21 49.89 17-Jun 103.27 48.86 17-Jul 103.74 49.56 17-Aug 103.28 48.45 17-Sep 103.12 52.95 17-Oct 103.35 54.92 17-Nov 103.24 62.71 17-Dec 103.28 64.32 18-Jan 102.4 69.08 18-Feb 101.9 64.15 18-Mar 101.3 63.91 18-Apr 63.22 18-May 68.43 18-Jun 65.81 18-Jul 65.54 18-Aug 66.94

KSHS/CRUDE TREND 104.50 80.00 104.00 70.00 103.50 60.00 103.00 102.50 50.00 102.00 40.00 101.50 30.00 101.00 20.00 100.50 100.00 10.00 99.50 0.00 17-Jul 18-Jan 17-Jan 17-Jun 17-Oct 17-Apr 18-Feb 17-Feb 17-Sep August 17-Dec 17-Aug 17-Nov 18-Mar 17-Mar 17-May October December September November

Mean Exchange Rates (KES/US$) Crude Prices

43 STATISTICS

Centre in-charge Container Equipment Response Team Leader Inventory build and Company Name Available Branded Equipping (St. John) short fall Response Centre established Location Name 1 Jomvu Total Kenya Francis Saha Paul Osiolo YES YES YES YES 2Voi Petro Oil Saul Amuhaya Donald Makhala YES NO NO NO 3 Mtito Andei Oilibya George Aika Beatrice YES YES YES NO 4 Sultan Hamud National Oil Freda Mbogo Titus Nyamai YES YES YES YES 5 Kyumvi Engen Musyoki Ngumii Tobias Taiwan YES YES NO NO 6 Kangemi Vivo Energy Stephen Muchoki Judith YES YES YES YES 7 Kinungi Kenol Kobil James Mutisya John Karanja YES NO NO NO 8 Naivasha Galana Samuel Githinji Francis Kingori YES YES YES YES 9 Sachangwan Gulf Energy Job Arasa Kennedy Kiptur YES YES YES YES 10 Molo (Salgaa) Total (K) Ltd Francis Saha Kennedy Kibet YES YES YES YES 11 Kericho (Kaitui) Hass Petroleum Andronico Ngiela Davies YES NO NO NO 12 Kisumu (Awasi) Oryx Energies Edward Ruto Charles Okoko NO NO NO NO 13 Busia Trojan International Johnson Sunyai Ernest Omusula NO NO NO NO 14 Eldoret (Burnt Forest) KPC Immaculate Musangi Meshack NO NO NO NO 15 Webuye Vivo Energy Stephen Muchoki Philip Wekesa YES YES YES YES 16 Malaba Hashi Energy Damaris Mutua Kenoz YES NO NO NO

Source; PIEA