INSIDE INSIDE CHANGES INTHE POLICY & REGULATORY LANDSCAPE The MagazineofthePetroleumInstituteEastAfrica VIVO EnergyKenya NewMDOutlinesVision New Mombasa-Nairobi Pipelinenowoperational Back Better –Building Post-budget Insights andAnalysis Litres ofFuelto GDC Over10Million National OilInks DealtoSupply TES TU A T C S O

M

Development Development

P L Enterprise Factors That Contribute to ASuccessful The NewKipevu OilTerminal Near Completion

Fueling

Fueling

I

KPC tobuildCommon User Facility Kenya’s Industrialization Agenda A

N

C 2

nd

Quarter, April-June2021 2nd Quarter, April-June2018

E

Y

C www.petroleum.co.ke

I

L

O

P

1

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 2 Geoffrey Nyanaro-TradeSpecialist,StanbicBankwithJohnKariukiOLAEnergyDealerNeemaFuelStationinMaiMahiu 1

2nd Quarter, April - June 2021 Vice Chairman-LibyaOilKenyaLimited P Kenya PetroleumRefineriesLimited .O. Box 8936-00200 Nairobi-Phone: 254-20-2249081,3313046, 3313047 Petroleum Insightispublished quarterlybythePetroleumInstituteofEast Africa. V National OilC Email: [email protected] - W Kurrent T Petroleum Institute ofEastAfrica-Fourth Floor Africa Gas&OilC Petrocity Energy(K)Limited East AFricanGasoilLimited iews expressedinthispublication donotnecessarilyreflectthe Galana OilKenyaLimited Galana OilKenyaLimited Kenya PipelineC Hass PetroleumLimited Gapco KenyaLimited Chairman -TotalPLC Mobile: 0722 221120 - Fax:254-203-313048 Hashi EnergyLimited Engen KenyaLimited Stabex International orporation ofKenya echnologies Limited V Gulf EnergyLimited Board ofDir KenolKobil Limited ivo EnergyLimited T position ofPIEA.Allrights reserved. Robert Paterson osha Petroleum V arun Sharma VTTI (K)LT SGS (K) BOC Gases o. Limited ompany ectors LT D D Richard Nandi Ayuma, Daniel Muasya, Dorice Itebaluk and Wanjiku Manyara, JenniferKibiru,Vivienne Contributors Wanjiku Manyara andJenniferKibiru Editorial Board Email: [email protected] 0723242440,0721234838 Tel -0202320083,0721845944 Kaunda Street 6th Floor, Town House, Alison andDavisGroupLtd Agency Advertising Editorial &Production John Ng’ang’a Bob Paterson Cooperative Bank Tristar Petroleum Kurrent Technologies Stabex International Lexo Energy East AfricanGasOil Tosha Petroleum (K)Limited VTTI Gapco Kenya Limited Africa Gas&Oil Hass Petroleum Kenya PetroleumRefineries Kenya PipelineCompany National OilCorporation Hashi EnergyLimited Galana Oil(K) EnergyLimited Gulf RUBiS Energy TotalEnergies Vice Chairman–VIVOEnergy Energy Chairman –OLA Board ofDirectors Tel -0716652011,0780011 Thika Superhighway 3rd Floor, MountainMall Jay andJeyMediaConsultants Views expressedinthispublicationdonot necessarily reflectthepositionofPIEA.All necessarily ebsite: www Petroleum Insight is published quarterly Petroleum Insightispublishedquarterly August Mwasame. Tony Ndolo,GideonRotich, Zoher Pirbhai,DanielMuasya, Kevin Adundo,EstherKiragu,HenryKahara, W C Kevin Adundo,TonyNdolo W Editorial Board- Email: [email protected] T Standard Street 6th Floor Alison andDavisGroupLtd Editorial, Pr P.O. Box8936-00200Nairobi-Phone: 254-20-2249081,3313046, 3313047 el -0202320083,0721845944 ontributors - anjiku Manyara,KimemiaMugo, anjiku Manyara,KimemiaMugo, Petroleum InstituteofEastAfrica. Petroleum InstituteofEastAfrica Email: [email protected] Website: www.petroleum.co.ke Fourth Floor,Fourth Bruce House , T Fax: 254-203-313048 .petroleum.co.ke Mobile: 0722221120 own House, , BruceHouse oduction &Advertising rights reserved.

by the

Cover story From theGeneralManager Statistics Upstream Pictorial

Fueling Solutions areKey to‘DispersedDevelopment’ Immeasurable Value ofSustainabilityintheOil&GasIndustry Oil Marketers Fueling TheKenya Economy KCB GroupLeads TheGreenAgenda Innovation Fueling DevelopmentinOilandGasIndustry Products Focusing onCoolants toImproveMaintenanceStandards andGrow DemandforQuality Regulator Scaling UpSurveillanceandEnforcementEffortsTo Enhance ConsumerSafety Creating Employment ThroughRetailNetworkExpansion In thisissue 5 8 29 37 25 32 12 4 7 Achieve profitable #WhatsYourBoldIdea across Oil the and Gas value chain. improves increases and uptime safety architecture integrates power and process, EcoStruxure end-to-end digital Our EcoStruxure Electric Schneider through EFFICIENCY se.com/oilgas ™ Solutions ™ [email protected] 3

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 T 5 4 3 2 1 Making cookinggasoutofreachwillmeanthat; Insight fromtheGM empowerment andtheverydignityofourwomenchildren. food security, afforestation, water towers reclamation, economic Budget owing to the centrality of LPG on our citizenry’s health, that LPG retains it zero rate status in the Financial Year 2021/2022 has occasioned us to once again call on Parliament to ensure 2021. implementation This of this law being deferred to 1st July rate. Subsequent lobby efforts resulted in the effective date of (Schedule I ofthe VAT imposing the VAT Act)effectively Standard LPG was removed from the list of Zero Rated supplies introduced in the Finance Act 2019 Clause No. 13 where he changes impacting VAT onLPG(Cooking Gas) were h cret . % oe wl cniu t dcie s no as decline to continue will cover % 7.4 current the afforestation target of 10% forest cover by 2030 and Kenya will not meet the United Nations recommended and firewood for trees charcoal burning. of harvesting from deforestation threat due to the climate change effects from our massive Kenya’s food security will continue to be under a real derailed. LPG by 2028 will be a dream in futility as it will be completely to kerosene and charcoal firewood, using Kenyans of 100% 21st April 2021 that Kenya was on course in converting President Uhuru Kenyatta re-commitment to the World on ouryouth. particularly for reduced employment and entrepreneurship opportunities will mean reduced demand of LPG cylinders and with it /or remain stagnant as reduced demand of cooking gas Local Manufacturing of LPG cylinders will be reversed and beforethey die birthday.celebrate theirfifth and sick get will Children These firewood. toxins from smoke as their mother’s cook with charcoal and of preventable pneumonia because annually of inhaling More than 8,649 Kenyan Children will continue to die a a a b a must beaddressedurgently. Climate change is a development and security threat that our reduce to greenhouse gasemissionsby32%2030. charcoal/firewood) with cooking (from Kenya has committed to eliminate indoor pollution upward. million-this will NOT be met if the cost of LPG is distorted cylinders to 18million by 2030 fromthe current 4.5 Kenya’s LPG growth action targets to increase LPG for ourChildren’s sake. and we must all put up this fight to KEEP LPG AFFORDABLE No Child in Kenya should die from the cooking of ameal combined). burdens of disease ofmalaria, tuberculosis and diarrhea 40% being young children and infants (exceeding the firewood is killing an estimated 21,600 Kenyans annually, with and charcoal like fuels cooking from pollution Kenya’s latest Economic Survey, indicates that indoor air Statement onTheNationalTreasury Proposal toImpose16%VAT onLPG 4 8 7 6 Petroleum InstituteofEastAfrica Wanjiku Manyara and sanitation,educationgenderequalityisindefensible. basic rights of health, food security, clean environment, water December 2020) by taxing LPG which guarantees access to the declared by Kenya to Revenue Authority for the period July To subsidize the Ksh 250 billion worth of unpaid tax (as was creation, tronaexport,tourism,water andsanitation. health, food security, deforestation, investments, jobs, wealth outstripped by the attendant massive costs on Children’s lives, to collect from imposing 16% VAT be on LPG will completely The Ksh 7 billion anticipated revenue that the Government hopes Conclusion: household cookingfuel. and burning of charcoal tree harvesting for provision of water,surface deteriorate from will continue to rapidly torivers and lakes and provide over 75% of the Country’s renewable rainwater filtered feed towers water five Kenya’s anelusive remain will dream as the enabling ecosystem which is supposed to aid towers water five our Reclaiming 6,000 jobshadbeenlost. 40,000 Kenyans were displaced from their homes and over approximately over where Turkana lakes and Nakuru our Naivasha, of in flooding the with year this earlier alive degradation came environmental and deforestation effects The climate changeandsiltation. which has been caused by degradation from deforestation, devastating up of Lakereality due to the drying Magadi from solid sodium carbonate(trona) mining, will become a revenue annual billion 9 Ksh Government of loss The household cookingfuel. will match the ratefor of tree harvesting afforestation effort a a a bird speciesincludingflamingoes. and fish unique of extinction apparent the to due this of Our Tourism sector revenues will further suffer the brunt of 50,000 community members and 600 employees so far. The drying up of Lake Magadi has put at risk the livelihoods million cubicmetersperyear. OR counter this forest destruction which stands at 10.3 Banning of logging and charcoal processing will NOT deter T said theCEO. preferred supplier ofyour fuel, lubricants and LPG requirements“ sources by the year 2030, we are honored to play a part as your doing and asyou gear up to developing 1065MW from geothermal chain of this country. As you progress with the good work you are “We recognize the critical role GDC is playing in the energy value outstanding serviceexcellenceandproductquality. and other commercial customers and that it will continue to offer Oilis reliable supplier of petroleum products to government agencies that National noted on its way toreclaiming its position as thepreferred and most Morintat Leparan Officer Executive Speaking during the signing ceremony, National Oil’s Chief than 10 million litres of fuel products to support GDC’s operations. National Oil Inks Deal to Supply Over 10 National OilInksDealtoSupply Company (GDC) that GDC will with see National more Oil supply deal with Geothermal Development million fuel supply he National Oil Corporation of Kenya has signed a multi- Million LitresofFueltoGDC financial year” saidEngOthieno. financial year” forward to an even stronger relationship as webegin the new as westrive to develop geothermal resources and we look success of our geothermal projects. We appreciate your support “We areproud to saythat National Oil is contributing to the continue thegreatpartnership. to forward looks and years (5) five last the over Oil National with noted that GDC has enjoyed a fantastic working relationship At the same time, GDC Managing Director Eng Jared Othieno OilCorporation of Kenya” inNational has GDC confidence the of message contract we are signing today is unprecedented. This is a clear KenyanKenya” The 100% outfits. are GDC and Oil National both as firmly and Mwananchi, the of supports H. E the President’s clarion call of “Buy Kenya, Build good common the for together productive partnership between Government agencies working “This partnership is another great example of fruitful and products over 10 Million Litres offuel GDC with signed to supply contract exchange fuel supply NOC CEO Mr. Leparan Moritant GDC MD Eng. Jared Othieno & signing Ceremony contract during the fuel supply Theuri Ag. GM Downstream NOC Morintat , CEO NOC, & MrBenson Othieno, MD GDC, Mr. Leparan GM Legal Affairs GDC, Eng. Jared From L toRMs Beatrice Kosgei, INDUSTRY NEWS 5

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 T INDUSTRY NEWS water and drainage system, supply power distribution system and utilities, Other facilities include electrical tank storageareas. and Kenya Pipeline Company Ltd. (KPC) (KPRL) Limited Refineries KenyaPetroleum oil product, allconnected to the existing pipelines each dedicated to a separate to aseparate oil product, six onshore sub-sea pipelines and risers each dedicated five facilities, landing for area 770m, one work boat wharf at Westmont The four berths have a total quay length of – petrol). (DPK – aviation fuel, AGO –diesel and PMS fuel oil, three types ofwhite oil products LPG, crude oil and products heavy namely exporting six different hydrocarbon of four berths capable of importing and The new oilterminal facility will consist pilling workisnowcomplete. and the entire superstructure including pipeline site areas, welding of the pipes which include the dredging of sub-sea December 2021. Majority of the works is expected tobecompleted by 17th the project is at 88.64% and Currently to boosthandlingofoilfortheregion. operations by end ofDecember this year, Kipevu Oil Terminal for will be ready (KOT) located opposite to theexisting he New Island Kipevu Oil Terminal 6 The NewKipevuOilTerminal Near by COVID-19 the period has since been was 30 months but due to interference The initial contract construction period Company(CCCC) at acostofUSD400million. the China Communication Construction The project is being constructed by for theIslandKOT. facilities, monitoring systems and navigation aids detection telecommunications SCADA, control and firefighting Completion regional economicdevelopment. petroleum oils which is important for Kenya’s competitiveness in handling the cost of business and improves at the old terminal. This in turn reduces vessel waiting time ashad been the case capacity at a time reducing 200,000dwt to handle four bigger vessels of up to Once complete, the Port will be able commencement dateofJanuary2019. reviewed to 34.5 months from the J Mr Kamau for winning this strong vehicle. “I take this opportunity to congratulate awarded theirprizeson sameday. and other motorbike winners that were Peter Murungi congratulated Mr Kamau Vivo Energy Kenya Managing Director at theEasternBypass. ceremony at Shell Kamakis service station overjoyed Kamau during the awarding Fi has actualized my aspiration” said the an Shinda employer.Fuso WEKA COLLABO true and I ammoving from an employee to own business. Today my dream has come a transportation vehicle and to run my ”I have always aspired to bean owner of work requireshimtotravelwidely. stations in Kenya given that his nature of has been fueling at various Shell service employed driver for thelast20years, SHINDA FUSO Fi promotion. John, an second edition of the WEKA COLLABO Kenya MDMr. PeterMurungi(Centre) SHINDA FUSO Fi promotion. An elated Mr. Kamau (Left) was awarded the Fuso FI truck by Simba Corp MD Mr. Nareesh Lekah (Right) and Vivo Energy John Kamau, a driver from Limuru town, is the winner of a brand new, Fuso Fi truck in the just-concluded second edition of the WEKA COLLABO Fuso Fi truck in the just-concluded town, is the winner of abrand new, ohn Kamau, a driver from Limuru VIVO EnergyKenya Concludes‘Weka Collabo’ National ConsumerPromotionwithAFusoFi partnered with banks for customers to line in Mombasa. Weassembly have Vehicle Assemblers (AVA), Simba Corp assembled at our Associated is locally “The Fuso Fithat has been won today line inMombasa. Assemblers (AVA), Simba Corp assembly assembled at Associated Vehiclelocally that the Fuso Fi worth Ksh. 5 Millission is Managing Director Naresh Leekha noted At the same time, Simba Corporation Shell servicestations.” all we can say is thank you for patronizing and time difficult this during customers promotion is away ofgiving back to our participated in the promotion. The thousand customers who actively “I appreciate the over four hundred fuels andproducts. to be brand ambassadors by using Shell today” said the M.Dasheurged winners commend the motorbike winners awarded and enhancing his business. I also I believe it will go a long way in improving Winner and personaldedicated customerservice. technological and technical expertise, fuels and lubricants, industry-leading Shell’s high-quality, differentiated services in the country. These include the very best of Shell’s products and Vivo Energy Kenya prides itself in offering shops. Afrigas, and shopping at Shell or welcome Shell fuels and lubricants, coolants, rewarding Shell customers for purchasing promotion aimed at appreciating and The second edition of the Weka Collabo won. cabin, and the grand prize a Fuso Fi truck win airtime, e-vouchers won, a Mitsubishi L200 double Kenyans 95 motorbikes won, over a thousand thousand fifty 12th February 2021, has seen over The promotion, which kicked off on Leekha. financing 95% with a repayment of up to 60months” said with Fi Fuso the acquire INDUSTRY NEWS 7

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 R largest informal settlements - Mukuru wasstudy conducted in one of Kenya’s Cooking Services (MECS) programme. The and is funded by UK FCDO Modern Energy Research Group (www.cleanairafrica.com) part of the CLEAN-Air(Africa) Global Health clean energy for cooking. Theproject is households switch from polluting fuels to in Nairobi that could help resource poor cooking innovations (enhanced cookware) of of new Liverpool, UK to launch a study INDUSTRY NEWS Research onClean CookingTechnologies Amref International University Concludes cooking potstudy Faith Mutua, a participant of the MECS with academics from the University University (AMIU), Nairobi teamed up esearchers from Amref International 8 for Healthin Mukuru,Nairobi AMIU distributesfuel efficientcookingpotsin Kenyan informal settlement followingresearchstudy on their potential to save fuel. In fact community with some excellent feedback “The pots were well liked by the participation inthestudy. receive brand new sufuria pottoappreciate their to raffle a either one ofthe intervention pots ora into entered were on 1stJune 2021 and all participants trial used to test the pots was completed The innovative randomised controlled cooking smoke.” asassociated with this deaths annually roles. In Kenya alone 23,000 premature and children due totraditional domestic or firewood (e.g. affects women charcoal) and particularly fuels solid these on and mortality in African settings reliant related to disease pollution is causally access to clean gas for cooking. This air air pollution’ even in households that have high levels of health damaging ‘household “This so-called ‘fuel stacking’ leads to project lead. charcoal” said Dr Elisa Puzzolo, the UK of polluting fuels such as wood and households to displace concurrent use time and fuel during cooking encouraging “Each pot has the potential to save both of thecookingpots. from the revolutionary fuel saving designs identify potential fuel and cost savings traditional pots (or ‘sufuria’ in Swahili) to were tested by 300 cooks against their pots fuel-efficient new Two Njenga. kwa Pope ([email protected]). or Prof Dan ([email protected]) [email protected]), Dr Elisa Puzzolo please contact Dr James Mwitari (James. any other aspect of the research program or For more information about the study climate andpublichealth” environment, saidProfPope. benefit to policies energy governments are implementing clean Ghana, Tanzania and Cameroon where conducting research in Kenya,currently energy for health in Africa. We are to overcome barriers to switching to clean household innovations financial and “We are looking at a range of technical energy forhealthinAfrica. income households toclean household for longtermsolutions to switching lower research team is committed in looking Air(Africa) Prof Dan Pope said that the At the same time, the Director of CLEAN- sub-Saharan Africa. households transition to clean cooking in a wider program to support resource poor is part of The enhanced cooking pot study shared, includingwithPIEA. by AMIU and will be widely analysed being from using the pots is currently Data on potential fuel and cost savings principal investigator. them” said Dr James Mwitari, the Kenyan of peopleasking where they can buy we have been approached by anumber I offshore blocks L11A,L11Bandl12oftheKenyan coastnearLamuandKwale counties. in off shore oilexploration. The company has an operating license toconduct exploration in Eni Kenya b.v isaconsortium of Eni a global Italian energy company that has vast experience community youcanhavemaximum benefits” said Tavolini. hold dear. Education is key. Ichallenge you to take up roles in oil and gas industry so that as a “I am very delighted today. This project is a testament to the values that we at Eni Kenya b.v will continueworkingwithcommunitiestoimprovetheirlivelihoods especially oneducation Eni Kenya b.v Managing Director Enrico Tavolini expressed his delight, saying that his company Kenya b.v iscommittedtotheeducation andempowermentofouryoungpeople” saidMorintat. is forthis reason that National Oil Corporation of Kenya with the support of partners such as Eni critical to invest in developing our young people as they hold the key toour country’s future. It “The future of this great country lies onthe brilliant minds of our children. That is why it is very quality ofeducation. and levels their uplift to facilities the utilize to students the challenged Officer Executive Chief and Eni Kenya b.v Managing Director Enrico Tavolini. Speaking during the ceremony, National Oil Morintat Mr. Leparan Officer Executive Chief Oil National by graced was ceremony handover The County forthelastthreeyears. project is expected to boost the quality of education in the school that has topped Voi Sub communities through high impact projects focused on impacting future generations. The The project, a collaboration of National Oil and Eni Kenya b.v, aims at giving back to the Mwakichuchu SecondarySchool,Voi, Taita Taveta County. handover of amodern kitchen and adining hall that will also serve asamultipurpose hall to Kenya b.v lived true to his words following the successful construction, completion and is the premise of progress in every society and in every family.” Indeed, National Oil and Eni t was Dr Kofi Annan who said that “Knowledge is power, information is liberating but education visitors bookbeforehandingoverakitchenanddininghalltoMwakcihuchu Secondaryschool National Oil CEO Leparan Morintat (L) and Eni kenya b.v Managing Direcdtor Enrico Tavolini signing the National OilandEniKenya B.V Hands Over AKitchenandDiningHallto Mwakichuchu Secondary Covid-19. Health protocol and guidelines on whilst observing Ministry of the clergy and local administration parents, county administration, The event was well attended by Andafu. music and drama festivals” said the extra curriculum activities like hall which we can now utilize for hall and also as a multipurpose us. This hall will serve as a dining Oil and Eni Kenya for considering “We are so grateful to National but tothecommunity. to the school a landmark not only noting that the project was now Mr. Oscar Andafu expressed his joy Corporation, the School principal While thanking Eni Kenya and the (KCSE). of Secondary School Examination Certificate Kenya 2020 the during the best boy in Voi Sub-county boarding students and produced The schoolhas a capacity of 371 support of partners ofpartners support the educationand such asEnikenya great country lies great country they holdthekey our youngpeople The futureofthis in developingour empowerment of young peopleas critical toinvest this reasonthat to ourcountry’s is committedto is why itisvery Kenya withthe on thebrilliant future. Itisfor Corporation of children. That minds ofour National Oil INDUSTRY NEWS 9

2nd Quarter, April - June 2021 SCHOOL OF PETROLEUM STUDIES TRAINING CALENDAR 2021/2022 (ONLINE MODULAR SESSIONS)

SCHOOL OF PETROLEUM STUDIES TRAINING CALENDAR 2021/2022 (PHYSICAL SESSIONS) CODE COURSE TITLE DURATION DATE (A)LEGAL & REGULATORY COURSES CODE COURSE TITLE DURATION DATE SPS 001A Petroleum sector legal and 2 hours Module 1: Petroleum Act 2019: What you need to know 11/8/2021 | 10.00 a.m-12.30 p.m. (A) LEGAL & REGULATORY COURSES regulatory framework Module 2: Petroleum Act 2019: Unpacking the LPG Segment 12/8/2021 | 10.00 a.m-12.30 p.m. SPS 003 A Petroleum sector regulatory training on LPG Bulk storage facilities 1 day 16/MARCH/2022 Module 3: Petroleum Act 2019: Unpacking the Supply Chain 13/8/2021 | 10.00 a.m-12.30 p.m. (B) OIL AND GAS RETAIL AND MARKETING COURSES (B) OIL AND GAS RETAIL AND MARKETING COURSES SPS007B Strategic customer service course 5 days 7-11/MARCH/2022 SPS 003B Service station management course 3 hours Module 1: Product knowledge 3/8/2021 | 9.30 a.m-3.30 p.m. SPS 008B Stocks management Level 1 5 days 21-25/FEBRUARY/2022 Module 2: Customer service management 4/8/2021 | 9.30 a.m-3.30 p.m. (C) HEALTH SAFETY SECURITY AND ENVRIONMENT COURSES Module 3: Understanding Service station lay out 5/8/2021 | 9.30 a.m-3.30 p.m. SPS 003C Occupational health and risk assessment 2 days 15-16/SEPTEMBER/2021 Module 4: Service station HSSE 6/8/2021 | 9.30 a.m-12.30 p.m. SPS 004C Emergency response plan (ERP) 2 days 19-20/JANUARY/2022 (C) HEALTH SAFETY SECURITY AND ENVRIONMENT COURSES SPS 005C Contractor safety management course Level 1 5 days 7-11/FEBRUARY/2022 SPS 003C Occupational health and risk 2 hours Module 1: Overview of the Occupational Safety and Health Act 30/9/2021 | 10.30 a.m-12.30 p.m. (D) AVIATION FUEL MANAGEMENT COURSE assessment (OSHA) SPS003D Aviation operations & management course 5 days 9-13/AUGUST/2021 SPS 005C Contractor safety management 2 hours Module 1: Fundamentals of contractor HSSE 9/9/2021 | 10.30 a.m-12.30 p.m. (E) LPG OPERATIONS SALES & MARKETING COURSES course Module 2: Work control procedures 10/9/2021 | 10.30 a.m-12.30 p.m. SPS001E LPG sales, operations and marketing management 5 days 23-27/AUGUST/2021 Module 3: Emergency response & spill management 13/9/2021 | 10.30 a.m-12.30 p.m. SPS 006 E LPG Installers course 5 days 3-7/DECEMBER /2021 Module 4: Petroleum facility maintenance procedures 14/9/2021 | 10.30 a.m-12.30 p.m. (F) RISK MANAGEMENT COURSES ONLINE Construction Occupational health 1.5 hours • Challenges in construction safety management 26/August/2021 SPS 001F Risk management in the oil and gas sector course 5 days 6-10/SEPTEMBER/2021 WEBINAR and safety management webinar • How to excel in construction safety management • Challenges in monitoring and evaluation of contractors SPS002F High level insurance and risk management training for directors, chief executive 1 day 17/NOVEMBER/2021 officers, managing directors and heads of departments (HOD’s) (D) AVIATION FUEL MANAGEMENT COURSE SPS003F Emergency response planning and preparedness 5 days 23-26/NOVEMBER/2021 SPS003D Aviation operations & management 2 hours Module 1: Jet fuel handling and refueling procedures 30/7/2021 | 10.30 a.m-12.30 p.m. course (G) PETROLEUM PRODUCTS LOGISTICS & HANDLING COURSES Module 2: Jet fuel equipment & facilities 1/8/2021 | 10.30 a.m-12.30 p.m. Module 3: Quality control and jet fuel re-certification procedures 2/8/2021 | 10.30 a.m-12.30 p.m. SPS003G Petroleum depots operations & distribution management 5 days 8-12/NOVEMBER/2021 (E) SAFE PETROLEUM PRODUCTS HANDLING & LOGISTICS COURSES SPS004G Introduction to the Oil & Gas Sector 5 days 20-24/SEPTEMBER/2021 SPS004G Introduction to the Oil & Gas 2 hours Module 1: Exploration & production 4/8/2021 | 10.30 a.m-12.30 p.m. SPS002M Petroleum Stocks management level 1 5 days 4-8/OCTOBER/2021 Sector Module 2: Legal and regulatory framework 5/8/2021 | 10.30 a.m-12.30 p.m. SPS 004M Petroleum Stocks management level 2 5 days 24-28/JANUARY/2022 Module 3: Integration of renewables in the oil and gas sector 6/8/2021 | 10.30 a.m-12.30 p.m. SPS 005M Petroleum road and transportation management 5 days 18-22/OCTOBER/2021 Module 4: Petroleum market trends and analysis 9/8/2021 | 10.30 a.m-12.30 p.m. SPS 008M First Aid competency and highway emergency response plan course (Drivers/ 5 days 1-5/NOVEMBER/2021 SPS 004M Petroleum road transportation 2 hours Module 1: Product knowledge, operations and procedures 22/9/2021 | 10.30 a.m-12.30 p.m. Emergency responders) management Module 2: Highway emergency response plan 23/9/2021 | 10.30 a.m-12.30 p.m. (H) LUBRICANTS COURSES Module 3: Health and wellness 24/9/2021 | 10.30 a.m-12.30 p.m. SPS001H Lubricants Competency Course 5 days 18-22/SEPTEMBER/2021 SPS003H Introduction to Lubricants 2 hours Module 1: Principles of lubricants and lubrication 1/9/2021 | 10.30 a.m-12.30 p.m. (J) EXECUTIVE MANAGERIAL COURSES Module 2: Lubricant characteristics, types and applications 2/9/2021 | 10.30 a.m-12.30 p.m. SPS001J Highlights of The Amendments to The Companies Act, 2015 by the statute Law 1 day 13/OCTOBER/2021 Module 3: Lubricant standards and waste oil management policies 3/9/2021 | 10.30 a.m-12.30 p.m. (Miscellaneous Amendment Act 2019) and regulations SPS002J Executive Introduction to the East Africa Oil and Gas sector 1 day 21/JULY/2021 (K) HUMAN RESOURCE MANAGEMENT COURSES SPS 003J Corporate governance course for board management (board of directors and 1 day 4/AUGUST/2021 SPS 001K Employee relationship management 2 hours Module 1: Labor relations and leadership 26/8/2021 | 10.30 a.m-12.30 p.m. senior management) Module 2: People management (K) HUMAN RESOURCE MANAGEMENT COURSES SPS 002K Supervision leadership and man- 2 hours Module 1: Managing employee teams (physical & virtual) 19-20/8/2021 | 10.30 a.m-12.30 p.m. SPS 001K Employee relationship management 2 days 2-3/FEBRUARY/2022 agement Module 2: Leadership & technical skills SPS 002K Supervision leadership and management 2 days 16-17/FEBURARY/2022 Module 3: Strategic decision making and problem solving (L) PERSONAL DEVELOPMENT COURSES (L) PERSONAL DEVELOPMENT COURSES SPS001L Reinventing yourself at the workplace 2 day SPS002L Work life Balance 2 hours Module 1: Definition of work life balance & remote working 30/7/2021 | 10.30 a.m-1.30 p.m. SPS002L Work life Balance 2 days 3-4/MARCH/2022 environment (M) FINANCING OIL AND GAS PROJECTS Module 2: Handling mental and physical stress & time management SPS001M Financing Oil and Gas Projects 1 day 18/AUGUST/2021 Location: Online via Microsoft teams/Google Meet Location: Nairobi/Eldoret/Mombasa/Kisumu Additional information: Online training charges: Express Private/Group Sessions: Scheduled calendar training sessions: Cost per person per module: *(US $ 150* / Kshs.15,000+VAT only Cost per person per module: *US $ 75*/ (Under the Express Individual/Group Sessions we offer individual Additional information: Kshs.7,500+VAT only or group sessions according to the clients availability and its flexible to customize the course to be completed within a specific Charges for physical training: PIEA non-member Kshs. 30,000 +VAT Alternative for scheduled calendar training sessions is period of time) Open courses: Training charges indicated are per person basis. 5-day course PIEA member Kshs. 49,000+VAT The minimum number required to form quorum for training is at least 12 Contact us for customized In-house and Open-course trainings which can be done online or as physical training sessions. PIEA non-member Kshs. 62,500 +VAT individuals. We also have online courses available and are scheduled in a 3-day course PIEA member Kshs. 35,000 +VAT separate calendar. For enquiries kindly contact: [email protected] or call: 0722 221 120 /020 224 9081 PIEA non-member Kshs. 40,000 +VAT For enquiries kindly contact: [email protected] or N/B - Scheduled calendar training sessions: -The 1-2-day course PIEA member Kshs. 25,000 +VAT Call: 0722 221 120 /020 224 9081 training take place as scheduled in the calendar dates/time as listed above. -Express Individual/Group sessions- The training is delivered as per trainee’s request depending on their requested availability. 2nd Quarter, April - June 2021 COVER STORY Chairman, PetroleumInstituteofEastAfrica Energy General Manager, OLA Millicent Onyonyi Creating EmploymentThroughRetail 12 Network Expansion O At OLA Energy, weare incisive At OLA on fostering African born prosperity consumer unmatchedconvenience. through the upgrade of our retail back courts hence offering the the whole family, by bringing services closer to the consumer We are also keen on turning our retail sites into destinations for among thefewcreatorsofemployment. lockdown enforced tocombat it’s spread, we are grateful to be the contraction of the economy arising from the countrywide With the declining employment rate in the country due to across the world with job losses reported in almost all sectors. The COVID-19 pandemic has hit the employment sector hard Stations. new employment opportunities we create in the new Service through are proud totransform the lives of 1,800 people annually employment of 360 new staff representing 360 households, we of an average of 18 new Service Stations annually. With the Our robust retail expansion program has resulted in establishment O’ptimium fuel,lubes,andLPGaswellConvenience stores. comprises of 102 stations across the country, offering additivated We have embarked on aggressive growth; our retail footprint now vibrant retailstationsacrossallmajortownsinKenya. Energy, fresh looking a superbrand and OLA has noticeably values: Integrity, HonestyandEquity. stations, operating in accordance with key African ethical presence across 18 African countries and over 1,200 service Energy is a key player in the African energy industry with LA Keep You Going. Energy: living by the words of our tagline - We OLA Jobs made by asingle person, but by ateam.” –Steve “Incredible things in the business world are never dealers andcustomers. with web portal SMS supportfor and a user-friendly vehicle tagging, real time transaction management with enhanced security features including RFID your key to convenience by providing the consumer O’Card – a fueling card solution. The new O’Card is in the fuel business with our state-of-the-art 2021, we are proud to launch our latest innovation This year, in line with our theme of Soaring Higher in a laundromat. centres, food courts, bank ATMs, chemists and even lubricants and LPG, we have premium service exemplary customer service. In addition to fuel, by offering high quality products coupled with customer experience at all our service stations creation. We promise to deliver a memorable through strategic partnerships geared at wealth F where all complaints on energy matters Complaints and Disputes Handling regime the Authority has established a robust the petroleum subsector. Additionally, energy sector and more particularly compliance, safety and security in the activities are geared towards enhancing activities across the country. These its surveillance and enforcement implement result, EPRA is now able to fully consumer protection programmes. Asa Directorate signalling a new dawn in its Enforcement & Consumer Protection (ECP) Firstly, 2018, EPRA established an in July this function. Authority has taken various steps towards interests of consumers. As such the that EPRA is duty bound to protect the consumer safety on EPRA. This implies consumer protection which encompasses Act 2019 has bestowed the mandate of Thankfully, Section 10 (hh) of the Energy standards andregulations. energy sector adhered to set sector if consumers and investorsonly in the resulting to fatal accidents are avoidable (EPRA). These scenarios, some of them and Petroleum Regulatory Authority theEnergy with Kenyans by filed reports or even gas explosions are common persons caused by poor electrical works, EPRA DirectorGeneral Daniel Kiptoo petrol stations, or of electrocution of that have stalled after fueling at or many years now, cases of cars and Enforcement Efforts Toand EnforcementEfforts Enhance Regulator Scaling Up Surveillance Regulator ScalingUpSurveillance Consumer Safety Authority (KRA), Kenya Bureau of agencies such as Kenya Revenue sector alongside other enforcement standards and regulations across the Collaborative efforts in enforcing have accesstohighqualityproducts malpractices. As a result, consumers apprehending suspects partaking in the petroleum subsector by swiftly has stamped out malpractices in the devolution of services, the Authority amongst other user facilities. Through Petroleum products transporters & LPGdepots, wholesale & retail sites, strengthened surveillance on petroleum closer to the Kenyan people. This has at delivering energy regulatory services Isiolo, Nakuru and Lodwar and are aimed are in Mombasa, Kisumu, Nyeri, Eldoret, seven in offices These Country.the offices across regions satellite opened has Within the past two years, the Authority resolved. complaints areprudently complaints. This has ensured that all which consumers can launch, and track portal provides a platform through Information Management System (RMIS) Further,and resolved. the Regulatory Energy are reported, investigated i.e. Electricity, Petroleum and Renewable A consumerengagement forumorganizedbyEPRAin thepast consumer safetynationwide. two levels ofGovernments will boost in creating partnerships across the leverage created bythese legislations 2012, the Authority is optimistic that the the Intergovernmental Relations Act and Act 2019, Energy the With officials. chiefs and other National Government campaigns and engagements through out through consumer workshops, media product standards. This has been carried at the grassroots on their rights and been educating the public continuously consumer safety. The Authority has Consumer education remains key to of LPGfacilitiesisat82%. at99.5%, while that program is currently levels for the fuel marking and monitoring sub sector. Forinstance, the compliance levels of compliance in the petroleum the Authority has achieved commendable the collaborative efforts, for instance, from substandard fuel products. Through that ensure that consumers are protected Authority (KMA) have created synergies Services (DOSHS), and the Kenya Maritime of Occupational Safety and Health Management Authority (NEMA), Directorate of Kenya (CAK), National Environmental Authority (ACA), Competition Authority Standards (KEBS), Anti-Counterfeit 13 COVER STORY

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 I Many motorists service their cars in the real coolant. water has been added to mimic to which appearance a dye of a “briefcase companies”. In most cases these coolants are merely of coolants of questionable quality often marketed by some demand flourishing a to led has sector this of neglect of Years coolants. such as food grade lubricants. The same cannot be said of lubricants such as synthetic oils as well as specialized products Kenya has seenhuge strides made in promotion of high-quality engine oils,industrialgearhydraulic oils,etc. of comprising portion 95% the on placed is effort more as fingers the focus on this critical product of maintenance slip through the COVER STORY In the reasons such as high costs or lack ofcomprehensive services. shunning fuels station service centres and OEM garages for StandardsandGrowDemandforQualityProducts ouig n olns o mrv Maintenance Improve to Coolants on Focusing such seemingly insignificantsuch volume,seemingly it is always possible to let 5% of the total lubricants volume used in a country. Owing to n thebest-case scenario, coolants business represents about Jua kali Jua 14 sector, the mechanic is king, and they have a Jua kali Jua sectors often understand and matchtherequirementsofdifferent engines. In this, they work in collaboration with engine manufacturers to advanced products to handle the demands of modern engines. Coolants of developers have had to come up with technically withdownsizing coupled engines inpower places a considerable strain in the working of coolants. increase This efficient. Modern car engines are smaller yet morepowerful and more modern carthathasbeenusingapropercoolantoverheat?” pail of water should trigger the critical question: “Why would a new car off with driver a trying to coolthe engine of arelatively highways due to overheating problems. The sight of adesperate high prevalence of vehicles stalled by the roadside on our major One indicator that all in not wellin thecoolants segment is the cheapandtherefore rulethismarketextremely segment. Understandably, water are coolants containing only and dye determinant of the product to use only is colour and price. good quality lubricants are used. However, oncoolants, the used.On engine oils, thanks to marketing campaigns by oil companies, be will products maintenance what on influence high From thisinitiative,3problemswereidentified: the of extent problem andthenproposeformulatecorrectivemeasures. the establish to was step first The problem. coolants country’s last year,Early stakeholders in the industry set off on a journey to address the lead tooverheatingproblems. From the foregoing, it is clear that plain water or an inferior coolant will ultimately coolant’s category. years developed coolants with the highest number of OEM approvals in the collaboration with major engine manufacturers in the world, BASF has over the of a product for a particular engine. For example, thanks to extensive For this reason, OEM approval ofacoolant is agoodguarantee of thesuitability

critical question:“Why wouldamodern carthathas coolants were extremely cheap and therefore a favourite of the coolants were extremely and corrosion of the cooling system leading to vehicle overheating. These A high volume ofcoolants sold bymostsmall auto shops caused rusting mechanics segment isthehighprevalence ofvehiclesstalled new caroffwithapailof water shouldtrigger the One indicatorthatallinnotwellthecoolants overheating problems.The sightofadesperate by theroadsideonour major highways dueto driver trying to cool the engine of a relatively tocooltheengine ofarelatively driver trying been usingapropercoolant overheat?”

Jua kali Jua

www.basf.co.ke Email: [email protected] Mobile +254780272702 BASF EastAfricaLtd Fuel andLubricantSolutions Technical AccountManager–East&West Africa Joseph Ndungu ASTM D1384&D4340. such performance coolants for set specifications produce a tropical coolant meeting and exceeding concentrate BS 6580 can be diluted up to 5% to market for production of tropical coolant. Super introduced Super concentrate BS 6580 in the Along with the above initiative, BASF has also more thanjustcolour.’ The central theme of this campaign is ‘Coolant is coloured water. a genuine product or simply truly and how to troubleshoot if the coolant used is coolant, the impact of a fake or low quality coolant inform the motorists about the functioning of a At the heart of this campaign is the objective to platforms suchasFacebookandYouTube. the initiative has been running on various online Dubbed “The Good Quality Coolant Campaign”, by BASF and interested partners in the industry. One such initiative has been spearheaded jointly coolants. to make more informed decisions regarding consumers influencing ,consequently problem the by industry players to sensitize the market about through through joint legislation effort but ideally not be addressed misinformation could obviously The problem of consumer ignorance and February ofthisyear. Theseincluded: the new coolants standards Gazetted by KEBSin very progressive changes were incorporated in Thanks to the effort of this technical committee, and propose changes to the coolant standards. technical committee was formed by KEBS to review interested organizations in the auto industry, a Under the auspices of PIEA as well as other

formulation oftheirproducts. using approved coolants concentrates in coolants producers to show evidence of as the nails test) and requirement for – abasic check ofcoolant quality (known framework. This has two prong approaches Introduction of a market surveillance of the additive package and addresses the needs comprises of anti- rust and anticorrosion the antifreeze coolant. Tropical coolant Introduction of atropical coolant alongside enforcement. outdated and had weaknesses in the areas of The coolants standards in the country were blue, greenorred,itwas goodtogo. coolant quality. Aslong as acoolant was There was ignorance by motorists regarding the coolingsystem. coolant that provides adequate protection for Jua kali kali Jua mechanics for acost-effective 15 COVER STORY

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 S n cnupin oe fiin ad fetv t mth theemerging tomatch effective market’s and needs. efficient more consumption and backdrop of continuous improvement of technologies to make oil extraction done research. This has growth come atthe rate (CAGR) of25.5% in recently This is expected to grow to $5,870.13 billion in 2021 at a compound annual COVER STORY Head ofEngineering&HSSE,LexoEnergy Humphrey Indire Innovation FuelingDevelopmentinOil advancement to remain the leading global industry at $4,677.45 billion. to AD 347 date, the oil and gas industry has ridden on the edge of technological in China in well oil known first-ever the of drilling the ince technology, intelligence(AI),toenhancedecisionmakingand boostthe andartificial 16 oil wellstoradiofrequency identification(RFID)tagsonvehiclefueltank caps.Data huge rawdatafieldthat industryspecialistsminebyinstalling sensorsfromrigsin react tosituations,potential defects,conductpredictivemaintenance, packaging bottom line.Thesecompaniesprocessalotof datafromtheiroperations.Itisthis analytics thenhelps todetectpatternsandtrendsguidedecisions onhowto analytics requirements and adequately adjustand plan.Asaresult,majoroilandgas requirements andadequately companies haveinvested inbigdata,cloudcomputing,blockchain heavily At thecentreofinnovation istheabilitytopredictandforecastbusiness new products,andorganize marketing merchandise. and GasIndustry By HumphreyIndire operations. the decisions made and have detailed visibility of refine to developed further are models and Algorithms with up to 20% savings made in maintenance costs. preventers (BOP) and enable real-time data collection The sensors used in the wells also work with blowout production and safety of the oil wells and reservoirs. monitor data the enables engineers to effectively operations via seismic nodes and sensors. Such unstructured data iscollected from day-to-day In theupstream oil industry, large quantities of organize marketing merchandise. predictive maintenance, packaging new products, and how to react to situations, potential defects, conduct detect patterns and trends to guide decisions on then helps to on vehicle fuel tank caps. Data analytics tags (RFID) identification frequency radio to wells specialists mine by installing sensors from rigs in oil industry that field data raw huge this is It operations. line. These companies process a lot of data from their to enhance decision making and boost thebottom (AI), intelligence artificial and technology, blockchain have invested in big data, cloud computing, heavily and plan. As a result, major oil and gas companies adjust forecast business requirements and adequately At the centre of innovation is the ability to predict and innovative ways toadaptthisnewmarket dynamic. find to companies marketing oil forced have working curfews, lockdowns, social distancing, and remote the COVID-19 global pandemic. Restricted movement, operations to sustain the recovery fromthe impact of Presently, oil companies have continued to reorganize change. born. One thing has been constant: innovation through era in the 19th century, when major oil companies were more viscous oil for lubrication purposes, to the big oil through distillation light oils were used in lamps and in leaps and bounds in innovation from 1847, when The modern history in the oil industry has moved in theregion. big role in tackling climate change agenda. This transition will play a to play a pivotal part in the GoK points across its retail network be installing electric car charging by 2025. Lexo Energy on its part will registered vehicles tobeelectric 4million to have 5% ofthe nearly government of Kenya (GoK) targets and electric vehicles in Kenya. The also opened an alley for hybrid Innovation in green energy has energy forall. affordable, reliable, and modern on theprovision ofsustainable, Goal number 7, which focuses Nations’ Sustainable Development with United to align themselves OMCs have taken this opportunity infrastructure of solar PV. Leading manufacture, importation, and regulations in 2020 to support the systems arena, EPRA drafted new In thesolar photovoltaic (PV) using LEDlightingatthestations. by reducing power consumption taken the lead in this area as well (GHG) emissions. Lexo Energy has change around greenhouse gas footprint and manage climate looking at, in reducing the carbon that Oil Marketing Companies are Green energy is another key front innovation edgetotheprocess. leading fuel companies have gone a step further by adding the is a compliance requirement by the Kenya Energy Act, 2019, picking any sharp volume drop in the tank. In asmuch as this Occupational Safety and Health Act (OSHA), 2007 by proactively a long way in guarding against product leakage in line with the With regards to environmental and social impact, the ATGs go recognised meansofmeasurement. calibration initiated by such systems including industry-wide with Standards the key(KEBS) is working closely players to have picked up with the movement of the sensors. Kenya Bureau of are all integrated at one location. Tank calibration is then easily systems (ATGs), forecourt controllers, and leak detectors that Underground fuel tanks are installed with Automatic Tank Gauging this, thereisveryefficientqualitycontrolmechanism. a keen controlled. With eyefordetail, all operations arestrictly information administered via an around-the-clock watch. With company in innovation, Lexo Energy has invested in having all using real-time data to make decisions. As Kenya’s leading fuel ways, of efficient most and safest the in run are operations that and across more than 40 retail fuel stations, we have ensured our business. Since the incorporation of the company in 2017, We at Lexo Energy, have maintained innovation at the core of fuel receivedintotheabove-groundstoragetanks(ASTs). ships. Flow meters and automation systems are used to control critical equipment in all depots receiving the product from the behaviour. Leading oil marketing companies (OMC’s) have installed risks involved in operations as well as monitoring consumer development has ensured that safety is paramount by minimizing In midstream and downstream operations, technological better tomorrow. forces to optimize resources and build talent pools forabig and exploring the development new frontiers by constantly in joining responsibility for us as business leaders and corporates is to fuel shift from standard practices due to the COVID-19 pandemic, the In the ever more complex field of volatile oil prices and the global computing, andgreenenergy. the tremendous opportunity offered by IoT, blockchain, cloud by investing in major technological breakthroughs to exploit to secure tomorrow’s strategically themselves energy solutions positioned have globally and region the in OMCs Most profitable. more also but making decision in quick and efficient businesses makecontrolled by big data smart solutions that will not only oil The future ofinnovation chain will be in the fuel industry supply industry supply chainwillbecontrolledby supply industry make oilbusinessesefficientandquickin big data smart solutions that will not only solutionsthatwillnotonly big datasmart decision makingbutalsomoreprofitable. have positioned themselves strategically strategically have positionedthemselves breakthroughs toexploitthetremendous opportunity offeredbyIoT,opportunity blockchain, to securetomorrow’s energysolutions Most OMCs in the region and globally Most OMCsintheregionandglobally cloud computing,andgreenenergy. by investing inmajortechnological The futureofinnovation inthefuel 17 COVER STORY

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 B COVER STORY meant pursuing positive environmental, the business’ strategic direction. It has objectives forming an integral part of focused on this course, with sustainability Over the years, the bank has been Goals (SDGs). out of the 17 UN Sustainable Development after they were set up, we adopted nine UN Global Compact. In 2017, two years only the same year the bank signed up to the policy was approved by the board in 2014, when the journey began. Its sustainability familiar territory, dating back to 2008 for KCB Group PLC, this is Fortunately business model. resilient, sustainable and responsible shift from unfettered capitalism to a more principles. It heralds anew era, a paradigm has to sustainability This commitment intensified profit. beyond investments, how to take a longer-term view of their businesses around the world are mulling of business in society. Increasingly, inspired re-imagination of the role the COVID-19 pandemic has also esides all the havoc it has wreaked, KCB GroupLeadsThe 18 Green Agenda initiatives in enterprise development, on digital banking; supporting community 106.1 billion. In addition to waiving fees restructured our loan portfolio worth KShs. a variety of initiatives, for instance we This has been attained by rolling out position astheregion’s leadingbank. banking industry’s role, and its catalytic toour long-term sustainability, considering the sense it makes cost, financial a aftershocks. Though this has come at the pandemic’s economic impact and to supporting customers to weather the Group has continued its commitment It is with an eye on sustainability that Sustainability Covid-19 ResponseforFuture organizational culture. has also been inculcated into the environmental impact. Sustainability individuals and businesses in integrating beyond traditional solutions, to support enriches design of customer propositions, impacts across the markets it operates in. Italso financial and economic social, leading role in promoting on ClimateAction(CCCA) stakeholders underthe of theUNPrinciplesfor Collective Commitment KCB Grouphastaken a the greenagenda.As banking institutionin its operations.Italso commitments across Responsible Banking a founding signatory a foundingsignatory Africa, alongside40 implementing these Group is proactively Group isproactively to alignwiththeUN other international became thefirst Climate Agenda. since 2019,the customers, while mobilizingstaffsupport. mechanisms and best practices for our funding solutions, financing partnerships, seeking opportunities for new strategic environmental impact. We are constantly by adopting solutions that mitigate become more environmentally conscious and enabling various stakeholders to standards in operations, while supporting It has ledtointegration of international development priorities. remaining relevant to respective national global best practice. This is done, while environmental impact, is aligned to green agenda, which is meant to minimize KCB Group’s conscious drive towards a Practice Aligning toInternationalBest Response Fund. donation to the COVID-19 Emergency Foundation; and aKShs. 150 million of KShs. 24.3 million through the KCB humanitarian response to the tune education, health, environmental, and considerations. As at the end of 2020, KCB compliance with environmental and social screening on prospective loans to ensure undertakes environmental and social risks its Group policies. As such the bank Management System embedded within group has a Social Environmental environmental and social impact, the To negate any possible negative next fiveyears. a target of growing it by over15%in the 4.2% of the net issued loans in 2020, with and US$188 million, accounting for about between US$162 million cumulatively through by corporates and SMEs stand At the moment, green projects extended portfolio. financed green its growing practices, KCB Group aims at progressively As an enabler of climate cautious Green Lending 2021. in piloting for set institutions financial for monitoring portfolio carbon footprint set methodology, with the new system for Carbon Accounting Financials (PCAF) development of thePartnership for is in addition to contributing towards align with the UN Climate Agenda. This Commitment on Climate Action (CCCA) to stakeholders under the Collective in Africa, alongside 40 other international institution banking first the became also commitments across its operations. It implementing these Group is proactively for Responsible Banking since 2019, the founding signatory of the UN Principles in promoting the green agenda. Asa KCB Group has taken aleading role Agreement, ofwhichKenya isasignatory. UN Global Compact and the Paris Climate strategic initiatives are aligned to SDGs, promoting responsible banking. All sustainable banking industry while of Responsible Banking to create a Programme Finance Initiative’s Principles bank operations the UN Environment This has led to the embedding into the netissuedloansin2020,withatargetofgrowingitby aims at progressively growing its green financed portfolio. growingitsgreenfinancedportfolio. aims atprogressively corporates and SMEs stand cumulatively betweenUS$162 corporates andSMEsstandcumulatively million andUS$188million,accountingforabout4.2%of As anenablerofclimatecautiouspractices,KCBGroup At themoment,greenprojectsextended throughby over 15% in the next fiveyears. over 15%inthenext frameworks and partners. and performance expected by various sustain the momentum of compliance year, SGD progress This is meant to Assessment (ESIA) compliant every that is Environmental and Social Impact the proportion of the corporate book To track progress, the bank also assesses reporting matrix. for its comprehensive sustainability and is preferred across industries globally used Reporting Initiative, which is widely initiatives is aligned to the Global Tracking of progress in its sustainability Progress Tracking andMeasuring customers. emissions for large SMEs and corporate emphasizing reduction of greenhouse gas support climate sensitive investments, Corporation and other core lenders to 150 million from the International Finance In addition tothis, KCB Group secured US$ and US$250million. region for projects between US$ 50 million resilient investment projects across the involved in development of green-climate GCF for onward lending to customers way for the bank toreceive funds from to begranted the accreditation. It paves first private sector entity and lender in Kenya the and financial Africa East first in the intermediary bank KCB made This and mitigationmeasures. to climate change through adaptation emissions and enhance ability to respond countries to reduce greenhouse Fund (GCF), which supports developing recent accreditation to the Green Climate a major boost following KCB Group’s These efforts for green financing received Social 91.8 billion through its Environmental and Group had screened loans worth KShs. 19 COVER STORY

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 C facilities in towns where projects are carried out. Indirect jobs dealers, and promoting boarding and catering services from local contractors, product and equipment procurement from local created, to name just a few; employment of locals through jobs segment, there is anarray ofemployment opportunities offered in 2019 alone by one economic sector. Under the indirect this would translate to 3,640 new employment opportunities twenty people get employed. Given the data gathered by PIEA, up. Under direct employment at a service station, on average, generating opportunities created with every service station set income for the community. There are direct and indirect income- its residence since this translates to increased sources of Entrance of a business into a location is a welcomed sign by Creation ofEmployment COVER STORY communities andcountieswheretheyaresetup. The impact mushroomingthe of these businesses positively clear indicationthatmorepeoplearegettingintothebusiness. 3,092 in 2019. This shows a 6.25% growth in the latter year, a the number of service stations were 2,910 in 2018 and grew to construction of these establishments. According to PIEA data, impacting our society and thus sector isthe positively increased tostart selling. This trend tells you that ready the petroleum M.D VivoEnergyKenya Peter Murungi more than one service station construction or one that is on the increase. Driving on highways in Kenya, youwill see onstruction of service stations across the country has been 20 Oil Marketers FuelingTheKenya

Economy Levies around branding: set timelines. actualize each county’s investment plans within shareholder’s issuance of various licenses and permits to enable investors to in the given plan. Therefore, counties need tofast-track the have funding timelines from shareholders to ensure they invest Construction Licenses and permits: policies tosupportentrepreneurshipinthissector. government, through various counties, can implement multiple As this sector of the economy continues to thrive, the sector. playing ground for those who want to be entrepreneurs in this opened up opportunities for big and small players, giving a fair dealerships, lubricants, and LPG sales. The petroleum sector has have come up and grown in the business both in service station The entrepreneurship agenda is not to beignored. Entrepreneurs bears fruits. nurtured, have a source of wealth it creation, and if diligently investors business the step first the with begins miles thousand experienced in this sector. Asthe adage states, a journey of a we see and product availability, amongst many other hurdles for example, stiff competition, comes from the array of brands actualized due tovarious factors that affect the businesses, this petroleum cake. The creation of wealth may not be swiftly products, then it translates that there is moneytobemadein every dawn, and they continue selling fuel and other petroleum investors. In acountry where service stations are coming up with owner. the Service stations in Kenya arecreating wealth for their for wealth of source a creating thus and profit a making at expects a return on their investment. A business always aims by constructing a service station or setting up a lubricants shop the investor. of Every investor putting in their money into the petroleum sector benefit financial the for up set are Businesses Wealth Creation&Entrepreneurship dealerships, andthegovernment. by contractors, transporters, cleaning agencies, motor vehicle and the country running. The value chain support is witnessed for new and upgrading existing facilities, keep the community brought about by service and maintenance activities, projects opportunities created with every service createdwithevery service opportunities Entrance ofabusinessintolocationis station setup.Underdirect employment at a service station,onaverage,twenty at aservice a welcomedsignbyitsresidencesince this translatestoincreasedsourcesof direct andindirectincome-generating income forthecommunity. Thereare people getemployed. To identify a business, you have to see Business communities continue offeringemploymentopportunities. government, there is a need to build the economies at the county level and the new frontier for the service stations footprint growth. With the devolved various business such as quick service restaurants. Convenience retailing is marketers should also factor in consumers’ convenience by bringing on board should continue investing in the counties. While investing in the counties, oil The Oil Marketing sector is a crucial driver of the Kenyan economy. OilMarketers venture intothecounties. business investors; this enables the business community to plan as they Blueprint: investors frominformaltradersandsquatterswhointerfere withthebusiness. Security: business communitiespaytherequiredfeesontimeandavoidpenalties. Invoices: to offerland need Counties process. leasing propositionstobusinesscommunitiesgrowtheireconomy. land leasing the fast-track to offices Liaison with Land registry: construction duetoplannedroadinaparticulararea. a green light to construct from the county and road authorities, blocking the permits and licenses tothe business community and avoid businesses having to align on the county’s road maps. The alignment will make it easier to issue Liaison with Road Authorities: find aworkingformulatogivebothpartieswin-winsolution. revenue for their areas, they should also look at the business’s existence and county to market their brands. As counties capitalize on avenues of racking in high, making it unattractive for businesses to utilize wall spaces within the move from county to county. Some counties ‘ building branding fees are very be abletorecognize the one branding fee paid for the vehicle and allow it to should not be charged branding fees in each county it passes. Counties should county and its vehicle has to traverse two or three counties to deliver goods, it for the investor to expand across counties. E.g., if a business is located in one in individual counties. The more the rates a company has to pay, the harder it is the counties. Buildings and vehicle branding attract payment, which isdifferent from other companies. There are many levies imposed on a business entity in its name orlogo;this is the identity they carry along and differentiates them Counties should work closely with local security Counties agencies should to protect work closely Timely issuance of invoices Timely for all rates, rents and signage will ensure Counties to consider sharing their development masterplans with Counties need to liaise with the local land registry Counties and local road authority offices need offices authority road local and Counties creating asourceofwealthfor the owner. stationsin Service Kenya arecreatingwealthfor the businesses,forexample, not be swiftly actualizeddue not beswiftly made inthispetroleumcake. to various factorsthataffect amongst many otherhurdles see andproductavailability, coming up with every dawn, coming upwithevery from thearrayofbrandswe products, thenittranslates their investors. Inacountry The creationofwealthmay where service stationsare where service A businessalways aimsat experienced inthissector and theycontinueselling that thereismoneytobe fuel andotherpetroleum making aprofitandthus stiff competition,comes 21 COVER STORY

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 W COVER STORY demand. Fossil fuels are deeply linkeddemand. Fossil fuels are deeply with over 95 percent ofglobal transportation petroleum meets world we live in. Currently products will have aprofound effect onthe production of gasoline, jet fuel and other to cut greenhouse gas emissions from the change. Efforts to meet ambitious targets action to be taken to tackle climate wider public opinion for more concrete greater pressure from governments and These initiatives have come in the wake of the middleofthiscentury. to net-zero greenhouse gas emissions by producers have now committed themselves planet. Some of the largest European oil can reduce the impact of fossil fuels onour greenhouse gas emissions in a way that are now setting serious goals to slash Immeasurable Value ofSustainabilityin Director ProcessAutomation,SchneiderElectricEastAfrica Josiah Habwe Large multinational oil companies ifyou’reespecially in Oil and Gas. e are living in interesting times, 22 the Oil&GasIndustry protecting the environment while industry willhavetoworkwithin industry regulatory frameworksaspublic regulatory infrastructure ofintegratedand starting theprocesstobuildan starting Sustainability andprofitability to safeguardtheenvironment digitized systems,companies pressure totake greaterstep increasingly morestringent increasingly are not mutually exclusive are notmutually can meetthechallenge of concepts. TheOilandGas intensify. Fortunately, by Article byJosiahHabwe Article remaining profitable consumption, minimize management of energy equipment availability, reduce costs while increasing adopt an holistic approach operations. Companies that into also relate to business diversification renewable energy but can with is associated more commonly Sustainability profitable. operations remain daily into their core ethos and sustainability performance Organizations that integrate environmental metrics. economic, social and the measurable value on Sustainability has a efficient. by benefits becoming more operationally financial and but reap tangible business impact on the environment, lead the way in reducing their the Middle East, to notonly potential for companies in the region. There is huge oil andgascompanies across for shift will act as a catalyst and governance metrics. This their environmental, social that loud businesses must improve out saying firms investment management some of the world’s largest investment policies, with reshaping increasingly about global warming are potential growth. Concerns percent of global power, offer and solar, which generate 20 renewables such as wind to a Wood Mackenzie report, in various forms. According will include renewable energy be based on a portfolio that companies will increasingly Future growth for Oil and Gas global economy. complex challenge for the and sustainability is a fuels, economic development, finding balance between fossil economic prosperity. Assuch, solutions are helping to make how innovative technology We seeing are already it, youcanmanageit. impact is. Ifyou can measure understand what their carbon integrated time, oil and gas majors can as data and information. In real refinery, a that be acargo vessel or actual physical asset, whether opportunity to replicate each the Digital Twin concept: the making. And then there’s enables real-time decision that monitoring and analysis solutions allow for remote safety modeling. Cloud-based management, automation and companies to improve energy force multiplier by allowing outlays. IIoT can act as a costs and lower installation eliminate expensive cabling wireless technologies also and Gas operators. In fact, more attractive option for Oil has dropped making it a far devices field and wireless technologies sensors, for The cost of smart technology Internet ofThings(IIoT). potential of the industrial realize the structures to truly into existing operational enough to be implemented Computing are now mature such as TheCloud and Edge a company? Technologies for benefits tangible become But how can these ideas business operations. adoption and integration into with achievable timetables for and become definable policies more than popular buzz words transformation need to be sustainability and digital For this to happen, and more. increasing worker training, accidents and releases, while improve theirenvironmental, willactasacatalyst socialandgovernancemetrics.Thisshift Middle East, to not only leadthewayMiddle East,tonotonly inreducingtheirimpactontheenvironment, butreap of theworld’s largestinvestment managementfirmssayingoutloudthatbusinessesmust Concerns aboutglobalwarming reshapinginvestment areincreasingly policies,withsome for oilandgascompaniesacrosstheregion.Thereishugepotentialin tangible businessandfinancialbenefitsbybecomingmoreoperationall The writercanbe reachedontheemail:[email protected] the environment whileremainingprofitable. infrastructure of integrated and digitized systems, companies can meet the challenge of protecting greater step to safeguard the environment intensify. Fortunately, bystarting the process to build an industrywill andGas Oil The have more stringent to work withinregulatory increasingly frameworks as public pressure to take concepts. exclusive mutually not are profitability and Sustainability future. of the introduction through efficiencies greater sustainable policies and processes, towardsoperators are positioning themselves a far brighter by realizing Indeed, profits. less mean not need undergoing is sector the shift paradigm The profitable. remain while to efficiency obligations shareholder greater meeting to path its on industry Gas and Oil the support can transformation Digital operators toremaincompetitiveinaworldwherethefocusis turning toenergytransparency. and improve, investmenttechnology continues to evolve in digital innovation must continue for significant where Industry Gas boosts to productivity are being seen. However, the industry cannot rest on its laurels and as and Oil the in change for force driving the becoming is Digitization workers. efficient extends the life more of critical equipment while and crucially reducing the risk of failure and protecting operators makes use energy smarter on emphasis This real-time. in health system and control systems, Oil and Gas companies can monitor energy consumption, power quality and management energy integrating By priorities. efficiency energy develop to helps and consumption IIoT, when combined with digitization strategies, delivers greater visibility across a company’s energy Technologies such asthese are anideal companion to theintroduction of renewable energy sources. problems beforetheyarise. This allows operators greater insight into how their system is running with the ability to anticipate now talk to each other, relaying information between devices and to acentral monitoring hub. equipment targets efficiency hit and sustainable Tobecome isolation. in operate longer no Devices work crewstocompleterepairssavingtimeandmoney. optimal performance. Sections that require toallow maintenance or replacing can be located quickly useful performance. in remote Thisareas technology to monitor is pipelines particularly and ensure devices places for example, computing, and equipment at the ‘edge’ of an integrated network thereby reducing latency and improving Edge efficiency. improved through smarter businesses y efficient. 23 COVER STORY

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 I Similar issues can be the same future opportunities. thus becoming less viable for economic opportunities and missing out onsocio- vicious cycle ofcommunities become a This can swiftly and regions to strike up trade. or forneighbouring countries receive outside investment, incentive for communities to for example, there is little stimulate. In the rural north, COVER STORY can be achallenge to Uganda, economic growth n the moreremote parts of Fueling SolutionsareKey to‘Dispersed Chief ExecutiveOfficerDalbitPetroleum Timothy Skudi 24

response to a tender from from Kampala. This was in located some 340kilometres of JetA-1at Gulu, a town a capacity of 720,000 litres built a petroleum depot with In 2018, Dalbit Uganda Limited underserved areas. Fueling solutions can bring to varied opportunities that new lie in fuel, and the many and answer to the problem may communities. However, an the continent’s dispersed experienced across many of Development’ By Timothy Skudi confidence, further opening further confidence, This has boosted investor now refuel at the depot. as well, whose aircraft can with neighbouring countries provided a connectivity link Fueling solutions have of fuelstoragefacilities. management in the handling emphasising effective Operating Procedures (SOPs), ups, with our Standard standards to local set has brought international catchment areas. Dalbit airfield and all the surrounding Gulu of capabilities as well as boosting the for local Ugandan citizens employment opportunities facilities, we were able to offer in the construction of aviation to South Sudan. By investing heading to Kampala enroute refuel in Gulu, rather than Planes now touch down to project. a challenging but rewarding them to increase capacity on but we were able to work with of demand from this client, on its own to meet the levels resources sufficient have not operations. Gulu Airport did in the region to support its needed supplies of jet fuel one ofourkey clients that beginning tobe realised. just potential is still only the continent, whose fuel just in Uganda, but across to allofthe population. Not same prosperity ison offer growth, and make sure the provide jobs, fuel economic We can connect communities, these ‘win-win’ opportunities. the fuel space need to look for communities, companies in underserved traditionally in largest cities, especially outside of the continent’s development across areas drive social and economic continues. To successfully But it is vital that such work lockdown regulations. government’s Covid-19 closures because of the challenges due to border we experienced logistics goes without saying that locally. And it almost it was available not readily manpower from Kampala as construction material and to import resources such as the clock.Attimes, we had were not able to work around generators and therefore on diesel meant we had to rely reliable electricity in the areas the beginning, the lack of without their challenges. In These projects were not and CentralAfricanRepublic. as Eastern DRC, South Sudan, neighbouring countries such long-term relationships with community as well as foster for the business within the helped open up opportunities aircrafts at Arua and this has costs by refueling their airlines. Airlines have cut supplies Jet A-1 to commercial capacity of 300,000 litres that a petroleum depot with a Nile region, and constructed Arua, located in the West Uganda Limited moved to since 2019, when Dalbit We have seen similar results up the area for business. 400 winnersdaily, andthegrandprizeaFusoFi. e-vouchers worth Kshs 5,000 for ten winners daily, airtime for June 2021, had the following prizes to be won; 35 motorbikes, service stations customers. The promotion, which ended in national consumer promotion that sought to reward all Shell was one of the big prizes of the Weka Collabo Promotion, a Simba Corporation Product Manager Pick-ups and Buses. This Energy Kenya Managing Director and Mr. Mehul Sachdev,(left) L200 Double Cabin pickup from Mr. Peter Murungi, (right) Vivo Mubea MwathaKelvin was allsmiles as hereceived a Mitsubishi Limuru Road. first the launch Team TotalEnergies Management service station in Kenya &in Africa: TotalEnergies the of members and Director Marketing Kenya Board & Olagoke Aluko - TotalEnergies Managing Africa M&S branch of TotalEnergies & Chairman of the TotalEnergies Jean-Philippe Torres –Executive Vice President of East & Central Michael Kili – NJD Energy, George Maranga–OLA Eric Wachira –Vivo Energy, Job Arasa–Gulf Energy, Jane Murogo –Total Energies, Cyprian Mungume–Total Energies, Eng. Nicholas Chelugo –KURA, Attendees: PIEA Secretariat, 2021 adjacent roadswith KURA–19 Industry site visit of Nanyuki and Mwakichuchu Sec. Sch.DinninghallandKitchen Eni kenya B.V Mr. Enrico Tavolini planting a tree after the handover of th May exercise tomarkWorld Environment Day Finance Directorleadsdepotstaffinatreeplanting Lawrencia Gichatha–TotalEnergies Marketing Kenya Committee) at the Trademark Hotel (Finance and Planning Departmental National Assembly Budget Proposals on the 3rdofJune 2021before the Defending the Petroleum Sector2021/2022National INDUSTRY PICTORIAL 25

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 T BUDGET ANALYSIS the KRA defied the global pandemic that pandemic global the defied KRA the released by the Commissioner General, collections. According to areport recently from aresurgent performance in KRA Revenue performance may also result enhancing rental tax among others. tax, voluntary tax disclosure programme, reforms through introduction of digital on broadening of the tax base and tax The projected performance is premised ring-fencing economicdevelopments. and inefficiencies and wastage reducing be pegged on raising revenue collection, key to economic recovery and is going to GDP 2024/2025. Reducing the budget deficit is to deficit budget ratio from 8.7% to3.6% by FY currently the reduce to In addition, the Government is keen seen whether this growth is achievable. from 0.6% in FY 2020/21 – it remains to be economic growth of6.6% in FY 2021/22 The Government is projecting an in achievable revenue. political expenditure, etc.) and a reduction economy recovery, debt repayments, COVID-19 expenditure demands (post significant resources, limited of context Kenya, economic recovery emerges in the from recession due to the pandemic. In when the global economy is emerging The budget was presented at a time Economic Recovery and Inclusive Growth”. Strategy for Resilient and Sustainable under the theme “Building Back Better: this year’s budget on10th June 2021 Kenya Senior Manager, PricewaterhouseCoopers Gideon Rotich Hon. (Amb.) Ukur Yatani presented National Treasury and Planning, he Cabinet Secretary (CS) for the Post-budget Insights and Analysis – Post-budget InsightsandAnalysis 26 Building BackBetter as theirrehabilitation andmaintenance. construction of roads and bridges as well and the big four agenda, to support aside for the economic stimulus package and airports. KSh 182.5 billion was set and focus on roads, rail, energy, ports his legacy. These cut across the country developments are planned to showcase term, it appears that several projects and final Kenyatta’s President Being Budget. has received generous allocation in this keeping with that trend, infrastructure as themain enabler ofaneconomy. In regarded Infrastructure is generally for thepurchaseofCOVID-19vaccines. In addition, KSh14.3B has been allocated pharmaceuticals and medical equipment. some tax relief measures on various against fight COVID-19, the government has introduced the bolster To economy. response to it is key to rebuilding the system and hence the country’s overstretched Kenya’s health care health sector. TheCOVID-19 pandemic KSh 121.1B being allocated to the remains a priority in this budget with Implementation of the big four agenda Expenditure allocation economic growth. SMEs and private business, slowing borrowing has the effect of locking out the deficit, 271 billion from foreign markets. Domestic budget billion from the domestic market and KSh the government is going to source KSh 662 fund To short term and long-term commitments. its fulfill to loans more seeks Government being on theupward growth as the revenues collected with loan payments on significantly weigh to continues Debt the requirement of the PFM Act of 30%. total government expenditure, against represents 18% (KSh 655 billion) of budget estimates forFY2021/22 it total annual expenditure. In the shrink when compared to the budget continues to gradually The development expenditure year. be replicated in the current financial seen whether this performance will KSh16.808 billion. It remains to be thus surpassing the target by annual target of KSh1.652 trillion a record KSh1.669 trillion against in eight years. The KRA collected economy tobeat its annual target continues to take a toll on the significant; 40% of the population – the population of and 70% of the rural population –is 40% significant; contribution to labour participation is 27% to GDP. Furthermore, the sector’s services, agriculture contributes an extra including manufacturing, distribution, and and through its links to other sectors Kenya’s exports attributable to agriculture, the last few years. With more than 60% of around 32-33% with relative decline in contribution to GDP has stagnated at transformation potential. The sector’s backbone, with enormous growth and The agricultural sector is the economy’s much progresswillbemadeintheyear. the NIFC, and it remains to be seen how years in establishing and operationalizing over the Government has moved slowly The 2021. December by services financial attracting investments and innovative the Authority to publish a framework for Centre (NIFC) Act in 2017, the CS directed of the Nairobi International Financial recovery phase. Following enactment sector is key to the post-pandemic pandemic. He further stated that the impact of theCOVID-19 from the adverse played by banks in cushioning Kenyans The CS acknowledged the important role difficult operatingyear. manufacturing sector recover from a of industries in the counties to helpthe special economic zones to spur growth addition, the government is banking on Ministries, Departments and Agencies. In 20.5 billion under various implementing local industries with an allocation ofKSh on CS indicated the government will promote year operating difficult account of the COVID-19 pandemic. The a of wake as part of the Big Four agenda, in the its reaffirmed the growth of the manufacturing sector has commitment to support and fast track government The trade andconnectivity. manufacturing and improving regional of the sector in promoting local this year’s budget reflects the importance in to infrastructure allocation significant in infrastructure development. The and projects close encourage the private sector to partner financially to time the PPP Act intended to hasten the Parliament proposed amendments to Furthermore, the CS has forwarded to growth during the COVID-19 pandemic. the economy following the depressed investment should help reinvigorate The activity generated from the Act, 2021. of tax changes enacted via the Finance and Act Insurance Act. There are quite a number Benefits Retirement Act, Duty 2016, Capital Markets Act, the Stamp the Miscellaneous Fees and Levies Act, Excise Duty Act, Tax Procedures Act (TPA), Tax Act(ITA), Value Added Tax (VAT) Act, Act amended the following Laws: Income to by the President on 29 June 2021. The Finance Act, 2021 (the Act) was assented reading the Budget on 10 June 2021. The the Finance Bill 2021 on 5May 2021 before Finance Bill 2021. The CS had published of thetax proposals contained in the CS in his budget speech reiterated some In termsofrevenue raising measures, the Revenue raisingmeasures… minimize inflationary pressure and the cost ofliving. and pressure inflationary minimize should environment, enhance job creation and reforms fiscal continue to create an enabling business and economic association, tax revenue growth. The at fostering economic growth, and by proposed other several measures aimed In addition tothe above, the government Own-Source Revenue. Enhancement of County Governments’ in the National Policy to Support Governments on interventions contained capacity building exercise for the County Treasury will roll out a nation-wide reliance on equitable share, the National own source revenue and reduce over- Governments’ capacities to enhance their revenue streams. To support County expanding the revenue base for existing revenue management system and deployment of one integrated county automating revenue collection through towards identifying new revenue streams, counties are expected to sustain efforts increased equitable share allocation, of KSh 316.5 billion in FY 2020/21. With increase of KSh 53.5 billion from allocation billion as equitable share. This is an Governments were allocated KSh 370.0 (OSR) collection efforts. The County to enhance their own source revenues level has put more pressure on counties on revenue collections at the national From a devolution front, the pressure Transformation andGrowthStrategy. Four agenda and theAgriculture Sector household income in line with the Big food and nutrition security and improve proposed and are poised to contribute to and Economic Recovery Strategy were the Economic Stimulus Programme addition, a number of initiatives within 2020/21, representing a 5% increase. In billion compared to KSh 52.8 billion in FY agricultural sector allocation is KES 60 employed in agriculture. The FY 2021/22 supplies used in the fishing industry fishing the in used supplies goods and equipment, tractors, taxable exemption to inter alia various medical Government has provided for VAT In abid tocushion its citizenry, the purchases is currently notrecoverable. purchases iscurrently intensive and the VAT incurred on the given that the projects are capital encourages investors in these sectors of exemption is a welcome move as it as case may be.The reintroduction relating to energy, petroleum or mining, Cabinet Secretary responsible for matters license upon recommendation by the granted a prospecting or exploration prospecting or exploration by a company exclusive use in geothermal, oil or mining imported or purchased for direct and Taxable goods, excluding motor vehicles, Extractive Sector and Renewable Energy. reintroduced VAT exemptions to the Additionally, the Government has green economy. to show Kenya’s commitment towards a fuel, i.e. wood fuel and charcoal and goes to areduction in the usage of biomass alternative sources of energy will lead biogas digesters. The adoption of these ethanol, biogas and prefabricated relief by exemption from VAT denatured on LPG, the Government provided some However, with the introduction of VAT energy and in turn the cost of living. ripple effect of increasing the cost of 2021. This has pushed a to 1st July though the commencement date was enacted via the Finance Act of 2020; standard rate of 16%. This change was Gas (LPG) isnow subject to VAT atthe Petroleum Liquified 2021, July 1 Effective sector, non-governmental considered inpreparation dated 9 July 2021,theCS dated 9July Government has already Government hasalready Budget fortheFinancial started preparations for started cycle. Inapublicnotice cycle nowfinalized,the has invited Government proposals oneconomic the FY2022-23budget policy measurestobe Agencies, theprivate of theNationalFiscal individuals tosubmit With thelastbudget organizations and Departments and Departments Year 2022/23 PricewaterhouseCoopers Kenya. Gideon Rotich – Senior Manager, various policy proposals for consideration. stakeholders should consider submitting With this opportunity, it is important that in January 2022. to the National Assembly expected to be completed and submitted will commence in August, 2021 and is preparation of the Finance Bill, 2022 government operations and as such Fiscal Budget process to ensure smooth there is need to fast-track the National an election year, the CS noted that 2022/23. Cognizant that year 2022 is Fiscal Budget for the Financial Year considered in preparation of the National on economic policy measures to be and individuals to submit proposals sector, non-governmental organizations Departments and Agencies, the private 2021, the CS has invited Government cycle. In a public notice dated 9July preparations for the FY 2022-23 budget started the Government has already finalized, now cycle budget last the With of doingbusinessinKenya. in withholding tax rate increases the cost Oil and Gas Sector in Kenya, the increase 5.625% to 10%. With the challenges in the to mining or petroleum operations from rate applicable to service fees in respect other hand increased the withholding tax fees. However, the Government has onthe service of definition the within falling not operations and other management fees in respect of mining and petroleum to subcontractors for services rendered tax rates applicable topayments made amendment will align the withholding sector from 12.5% to 10%. This fees paid by persons in the extractive management, training and professional withholding tax rate applicable to The Government has reduced the leaving tomorefavorablejurisdictions. expose the country to the risk of investors to use Kenya asaregional hub and country unfavorable to investors looking services from Kenya and may make the doing business for companies exporting supplies. This will increase the cost of deduct input tax incurred to make these that taxpayers will not be entitled to services from zero rate to exempt means change in status ofthe other exported of goods originating from Kenya. The exempt from VAT except for transportation exportation of taxable services is now From a service industry perspective, the fish processingandhandlingetc. cages, fish pond construction and maintenance, and storage, cold operations, including fish feeding and handling, water BUDGET ANALYSIS 27

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 K GUEST CONTRIBUTOR 96 cores within the financial year 2021 – 2021 year financial the within cores 96 cores from the Fibre Optic Cable plant of onboard more customers to take up more FOC commercialization team is working to Jamii Telecom and Wananchi Group. The “which we are selling to Safaricom PLC, the company’s Fibre Optic Cable (FOC) Nairobi by 2023. He further highlighted Gas Petroleum Liquefied (LPG) storage facilities in Mombasa and up put to up Dr Irungu added that KPC isgearing spirited. highly the country and region are on course and earnings and enhance KPC’s footprint in pivotal projects that will boost revenue Dr Irungu said implementation of the Oil the of Marketing Companies (OMCs) in June 2021, Officers Executive Chief with Speaking during abreakfast meeting customers’ needs. will be delivered towards meeting its Strategic Plan (CSP) is on course and implementation of KPC’s Corporate Pictorials oftheupcomingKOJcomplementary facility–MahathiInfraJettyinUganda.Tanks, ship,jettyandloadinggantry industry players that comprehensive Director Macharia Irungu has told enya Pipeline Company Managing 28 KPC’s Vision2025onCourse, MD AssuresCustomers 2021 & Residences, Westlands, on 23rd June, the CEOs’ Breakfast at Movenpick Hotel addressing OMCs and other guests during KPC’s Board Chairperson, Ms. Rita Okuthe, breakfast forum. addressing guests during the CEOs’ Managing Director Dr. Macharia Irungu for theimproved efficiencyevidentinallservice deliverypoints. Kisumu between 25 Customer feedback forums were also held in Nakuru, Eldoret and efficiency” saidtheG.M. truck from 30 minutes to 15minutes thus increasing operating and Nakuru that are designed to reduce the time taken toloada for example, the new bottom loading facilities in Kisumu, Eldoret outlets in terms of the depots’ evacuation capacity is increased; “As the inlet capacity is increased, KPC has ensured that the capacity. improve inlet completed will greatly and once successfully was the Kipevu Oil Terminal 2 (KOT2) upgrade which is on course issues affecting the industry. Among the projects she mentioned a presentation on capacity enhancement projects and emerging General Manager, Strategy and Compliance, Zilper Abong’o, gave added. to your concerns and lessen your burden of doing business” she “We have a solemn duty to listen to you and act appropriately efficiently. customer pain-points is committed to listening and remedying Okuthe added that being a customer-obsessed organization, KPC stakeholders”, shesaid. to deliver; in quality and impact to our customers and broader “We have a profound mandate for which the company is keen company deliversonitsmandate. with the management to ensure is working that closely the KPC Board Chairperson, Rita Okuthe on her part said the Board Southern Ethiopiamarket. In addition, KPC isplanning to capture the large and lucrative Port-South Sudan-Ethiopia-Transport Corridor project. (LAPSSET) pipeline connecting South Sudan to Lamu through the Lamu The Managing Director said KPC is earmarked to construct a several bottlenecksintheloadingchain. evacuation of products from the depots as welleliminating The OMCs applauded the project as a game changer in the companies executives. todowithout looking back,”resolved hetold the oil marketing “We are committed to serving you better and this we have that theprojectwas aimedatimprovingKPC’s services. MD thanked the OMC’s forembracing the innovation and reiterated On the success of KPC SAP & KRAiCMS integration project, the withthemarketthemselves possibilities. He encouraged the OMCs to visit the facilities and familiarize in guarantee Uganda and security the region. of product supply in September 2021 by the developers. Mahathi Infra is poised to for Kisumu Oil Jetty). The team was assured of its completion Mahathi Infra jetty facility in Uganda (a complimentary facility In June 2021, Dr Irungu led an executive management team to vulnerable Kenyans acrossall47counties. Government’s effort to avail alcohol-based hand sanitizers to of the COVID-19 pandemic in March 2020 which reinforced the The M.Dlauded the OMCs for their support during the outbreak the breakfastmeeting. sales through their own personal networks” said the M.D during 2022 and it is encouraging all within the company to help boost th to 28 th May 2021. The OMCs commended KPC customer visitto Uganda onthe16thofJune,2021 Meeting with a section of Uganda OMCs with KPC Team during a Delighted Nakurucustomersenjoyingasumptuousdinner. commission inUganda KPC team led byDr. Macharia Irungu paying a courtesy call at the high Managing DirectorDr. MachariaIrungu introducing the incoming Managing Director Mr. Eric Fanchini to KPC’s Outgoing Managing Director of TotalEnergies, Mr Olagoke Aluko GUEST CONTRIBUTOR 29

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 D Energy Institute (U.K.). International Project Finance Association (IPFA) and is a Member of the (FIDIC). I am also a Member of the East Africa Branch Council of the sit in the board of International Federation of Consulting Engineers International Federation of Consulting Engineers (FIDIC Africa) and now the private sector in Kenya. I have also been chair of the regional surprised to beappointed at the board of KEPSA – the epic voice of consecutive terms, each of two years. Recently, I was pleasantly board, I was there asamember and later became chair and did three ACEK I joined KEPSA and went on tothe Energy and Extractives Sector as a committee member, treasurer, secretary, and chairman. Through the Association of Consulting Engineers (ACEK) which I joined in 2005 I have beenanactive member of KEPSA for closeto10years through Engineers ofKenya Hespoke toPetroleumInsightonhowrunasuccessfulbusiness interest of engineers in various capacities. He is a Registered Consulting Engineer with the Engineers Board of Kenya and a Fellow with the Institute of and sits in various boards that include KEPSA (Kenya engineering Private Sector Alliance), and FIDIC (International Federation for the of Consulting Engineers) advocating of field the in many mentoring entrepreneur, seasoned a is Technologies Kurrent Officer, Executive Chief EBS, Mwangi, N. James Eng. GUEST CONTRIBUTOR Factors ThatContributetoASuccessful Chief ExecutiveOfficer, Kurrent Technologies Eng. JamesN.Mwangi, EBS more peoplehavejoinedtheworldofbusinessafterexitingemploymentwithlittletonoknowledgewhatlaysahead. oing business in Kenya can be an exciting and frustrating experience depending on one’s levelofpreparedness. In the recent past, Excerpts 30 engineering andbusinessfraternity? mean to you as a person and as a representative of the Kenya Private Sector Alliance. What does this appointment Congratulations on your recent appointment to the board of Enterprise the business community and ultimately the the people businessof community and ultimately and growing the economy. They did very good to cushion the importance of private sector in creating wealth, job recommendations by government shows that it recognizes these of implementation The flows. cash their cushioning helped SMEs in made to government by KEPSA that really Tax incentives were some ofthe recommendations areas withintheEnergysector. has been anincrease in inquiries and opportunities in new more opportunities to adjust how we dobusiness. There much improvement and most importantly, wehave seen circumstances. Business has come back, and we can see lessons about health and preparedness for unseen almost full capacity but of course learning important people as to ourbusiness. After several months we wereback to office the to back got back started adjusting to the pandemic and slowly came gradually togovernment We risk. adhere to offices our health protocols and not expose our employees to undue close to had we Business slowed down and we had to adjust. At onetime, honour. business, the economy Kenya. and largely It’s a great participate at an even higher level onmatters that affect development partners. Being in the board means I can of Governors (CoG) and other stakeholders such as be it The National assembly, The Judiciary, The Council government at alllevelsand other important stakeholders dialogue platform. This is where we have dialogue with it’spolicy matters but more importantly the public-private The conversations todowith within KEPSA are largely an engineerwhileunderstandingthebiggerpicture. for mythese boards has helped me toadvocate interest as that affect my profession are taking place and being in I have always seenalotofvalue to bewhere conversations did thesemeasureshaveany impactonSMEs? businesses by reducing VAT and other taxes, In 2020, the government tried to cushion struck? Technologies since the Covid-19 Pandemic How has business been for SMEs like Kurrent to earn more and practice to just say No when it doesn’t work for For your personal development; hire apersonal coach, learn more and healthy. Thisiscritical. fit Stay inevitable. its times at – change and future the Embrace to your advantage. Practice persistence, complete the Past to willing to defend it at all costs. Ask! Ask! Ask! and use feedback and do it away. Bewilling to pay the price – it is your company, be you see. Act – don’t wait for others to doit for you, feel the fear Goal setting and release the Brakes - see what u want, get what Always believe in yourself and it’s possible, unleash the power of for your life – don’t goblaming other people for your mistakes. to besuccessful in business. You need take 100% responsibility I often encourage start-ups to use the Jan Canfield model of how withthosethattheycantrustandhaveagility.themselves in integrity and doing the right thing – people love associating keep yourself informed of the latest developments. There is value and always – read is powerwidely in knowledge and advocacy do duediligence. Decisions can wait a minute longer. Then there decisions. If something doesn’t sit well with you, take your time to the power ofinstinct – always trust your instincts when making started small. My greatest lessons when I got into business was and identify an opportunity where you can fill a gap. All companies When getting to any business, one must be prepared mentally financial management. sound having of importance the and productivity and efficiency both personal and company, value ofhaving good systems for value of mentors that help you stay on course, power of brand friends etc.), power of partnerships (bigger jobs, morereturns), networks(e.g. associations, clubs, focus groups, choosing good perseverance, importance of taking calculated risks, power of got tolearn certain life skills, key amongst them discipline, one has. Iencourage people not to be scared but they have start small businesses based on the skills and knowledge that thing is working for a large corporation. We to must be ready fulfilling only the that thinking our change must We businesses. 2016 and this means that there is still more potential for small GDP according to aKenya Bureau of Statistics’ survey done in are critical in this country. SMEs contribute about 28% of the micro, small and medium enterprises, and this shows that SMEs Over 80% of those that are employed, they are employed by the affairs and can only dosothroughtaxes. affairs andcanonly recovered but government too needs to run its have not fully incentives would beimplemented forlonger since businesses this country during that tough period. We had hoped that the business before? considering those that have advice never done their own businesses. What would be your starting in the wake of this pandemic and thought about Many out of work people have found themselves take part inpublicstakeholdertake toshapepolicywhich part consultationopportunities in turnshapelegislation thatgovernstheboundariesunderwhichyou work.In People musttake interestintheway operates,isgoverned,and thiscountry other words,ignorance isfatalinbusiness. professionals strugglewith. with the law.comply This is an area that many people including and when in doubt, check it out. Work with Integrity and always you. Keep your agreements, it will show that you are dependable people whoknow. people discuss relevant from experts or things and seek advice organizations many of whom are members of KEPSA. Be where fellow Kenyans and professional to join business membership other words, ignorance is fatal in business. In closing I encourage legislation that governs the boundaries under which you work. In consultation opportunities to shape policy which in turn shape country operates, is governed, and take part in public stakeholder under which you work. People must take interest in the way this You need tounderstand the circumstances and boundaries in the business front and understand the prevailing legislation. to take interest in advocacy, get knowledge of what is happening This country has great potential, and I would like tourge people better inthelongrun. Running a business in the right way mayseempunitive but it’s perceive you, doyouhave integrity, what are your networks? to take abreak. Remember you are the brand – how do people the business isalldependent on you, but you can choose when attention hence the need to work more hours – the survival of is alsoimportant to understand that a new business requires your Being your own bossmeans you arein control of your own life. It don’t sleepinthesamebed. it comes in. Understand that your money and company’s money is not to get too excited about money no matter how much of a payments, structure your expenses and savings. They key thing Identify finances. financial sound to a management system that shows how you follow-up your have and comes with work it can you that when bank good frugal be must One is managed. is not too much or too little money, it is all dependent on how it andget There money. understand Try you help to skills financial basic more. some make first more, spend to - consciousness For abusiness to survive, you need to develop a positive Money for thebusinesstostayafloat? start-ups, what is your advice on balancing finances Finances have always been a challenge to most Any othercomment? GUEST CONTRIBUTOR 31

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 T UPSTREAM that despite the decline of It is however worth noting to cleanersourcesofenergy. amidst global pressure to shift their energy mix portfolios as organizations reconsider fossil fuel projects doubtful rendered most oftheyoung green energy that has the continued shift towards companies’ liquidity levels and pandemic that has strained as aresult of the Covid -19 change in business strategy decline in global oil prices, projects orchestrated by investments in upstream to decrease in global Strategy and Operations advisor specializingonEnergy Strategy andOperationsadvisor Daniel Muasya slowed down due significantly has sector he Kenya upstream Fueling DevelopmentinEastAfrica 32 signed bythesame parties. for the project were also the transportation agreement Shareholding agreement and Government Agreement, Tanga, on aday when Host billion pipeline from Hoima to construction of the oil $3.5 commencement of the Pipeline agreement allowing the East Africa Crude Oil oil companies signed Uganda, and the participating During this quarter, Tanzania, region. that all is not lost for the oil and gas activities signaling Tanzania continue tocarry out countries of Uganda and activity in Kenya, neighboring to benefit from the Lokichar oil project in Kenya. Originating from Originating Kenya. in project oil Lokichar the from benefit to is a massive infrastructure project that is expected (LAPPSET) The Lamu Port, South Sudan, Ethiopia Transport corridor and itssupportingeconomies. construction of the East Africa activities Oil Pipeline especially in the local economy while supporting Uganda’s oil and gas powering its infrastructuralgrowth development consequently therefore riding on projected growth in Uganda to accelerate andtransportation system from the port of Mombasa to Uganda’s border. Kenya is processes clearance port efficient Kenya’s 85% of its imported cargo. This buttresses the importance of eight million tons (by Kenya Ports Authority), accounting for that Uganda’s annual usage of the port to be approximately As the largest consumer of Kenya’s Mombasa port, it is estimated inTanzania.activities inUgandaandpartly gas and oil from massively benefit will that projects the of some are city capital the in traffic ease to Nairobi in expressway an of congestion at the port of Mombasa, and the ongoing construction port at the coast, the proposed dry port in Naivasha to ease Gauge Railway line to Naivasha, Construction of the new Lamu countries. Theconstruction of the Standard networks, and connectivity with its neighboring rail and road major its within efficiency transport massive infrastructure projects targeting improved In therecent past, Kenya has embarked on Infrastructure Growth ways. on Tanzania and Uganda projects in the following on track, a great opportunity exists and can tap on how tobring back the Lokichar oilproject back out figures kenya As bilateralism. and regionalism of international trade from multilateralism to driven by growth in population and global shift Kenya, Uganda, and Tanzania continues to expand in petroleum upstream sector. In addition, trade between development of beneficiaries key and externally,locally this would be one of the infrastructure and robust market demand, both thrive on an manufacturing enabling would only of its key pillars and while it is no secret that big four agenda include manufacturing as one Kenya’s vision 2030 and President Kenyatta’s agenda. of activities the its neighboring countries to fuel its development from benefit meaningfully and Kenya, position itself the country can strategically that despite the slow oiland gas activities in between Mombasa and Dar es Salaam suggesting allow construction of a 600 Kilometers pipeline a $1.1 billion gas pipeline agreement that will in Tanzania. In addition, Kenya and Tanzania signed activities upstream flourishing once the of revival restart after stalling for oversix years signaling a proposed $30 billion LNG complex in Lindi would Corporation and International Oil Companies for the between Tanzania Petroleum Development committed to the parliament that negotiations In Tanzania, President Suluhu Hassan also investment on transportation Intentional accelerated investments. Therefore, similar economic enabling neighboring countries through accrue to Kenya could and its that benefits the and of infrastructural growth emphasizes the importance between 2000 and 2012. This infrastructure investments the backdrop of massive growing global economy on became the second fastest world bank reports that India mechanism. Indeed, the and poverty alleviation growth in productivity and a key accelerator to interventions fiscal other any higher than is substantially tool with its output multiplier macro-economic stabilization is an extraordinary tool for Infrastructural investment corridor.pipeline andLAPPSET economic activities along the region through accelerated Kenya’straditionally northern open the to massively pipeline to Lamu, is expected construction of the Kenya oil Lake Turkana, the expected port clearance processes and transportation system from the port of system fromtheport clearanceprocesses andtransportation port supporting Uganda’ssupporting construction of oil andgas activitiesespecially levels withintheconsumingcommunity. Intherecentpast,several industrial productioninthecountriesdenoting riseinconsumption It isthereforeexpected thatuponcommencementofproduction Mombasa toUganda’s border. Kenya is thereforeridingon projected manufacturing organizations havehaltedproduction activitiesdue imported cargo. This buttresses the importance ofKenya’s cargo. Thisbuttresses theimportance imported efficient to heavy fuelcostsormovedproductionplantstoothercountries. to heavy associated with importation offuelfromMiddleEastto Africa associated withimportation oil inUgandaandKenya, andgasinTanzania severalofthecosts As thelargest consumer ofKenya’s itis estimated Mombasaport, that Uganda’s eight tobe approximately annualusage oftheport million tons(byKenya Authority), accounting for85%of its Ports In additiontoincreasedtrade,availability ofcheapersource growth inUgandatoaccelerate its infrastructural development growth energy within the region will substantially drivedowncostof energy withintheregionwillsubstantially consequently powering growth inthe local economy powering growth consequently while the East Africa Oil Pipeline and its supporting economies the EastAfrica OilPipeline andits supporting ignore. Kenya government should not a great opportunity that the and technology systems is project fueling demand the East Africa Oil Pipeline 10% after the completion of growth of approximately and Tanzania project a GDP the EAC platform. Uganda different economies under enhance trade between the East African economies to presents an opportunity for neighbors. This and greedy’ from exploitation by ‘bigger to protect their economies adopted similar approaches world countries have also smaller economies and third USA and China at global level, rise. Whereas this is led by protectionism continues to economic capitalism and to multilateralism as and bilateralism as opposed embrace regionalization, global economies now As indicated earlier, many Trade Increased Regional will beeliminated for the need for a refinery in refinery a for need the for be eliminated. Emphasizing Middle East toEast Africa will with importation of fuel from of the costs associated and gas in Tanzania several of oil in Uganda and Kenya, commencement of production therefore expected that upon plants to other countries. It is costs ormoved production activities due to heavy fuel have halted production manufacturing organizations In the recent past, several the consuming community. in consumption levels within in the countries denoting rise cost of industrial production drive down will substantially of energy within the region availability of cheaper source In addition to increased trade, neighboring countries. well asskilled labor from its of its manufactured goods as infrastructure, consumption increased demand on its expected to experience Market protocol, Kenya is Under the East Africa Common all sectors of the economy. and consumption across com Muasya@thebluediamondKe. specializing on Energy. Daniel. and Operations advisor The writer is Strategy regional trade. Payments through increased and improved Balance of infrastructure, GDP growth, stimulating further growth in will create a cyclic effect and Kenya, respectively. This and 95% resources in Uganda work in the remaining 80% exploration further finances discovered resources already commercialization of the is therefore imperative that Oil Companies or directly. It projects through their National countries to invest in such at theneed for individual in global strategy that hints fuel projects, a major shift in fossil activities especially reduced profitability,investments in energy significantly have and most oil corporations cash cash-flow oil and gas cycle. To preserve significant investments at this phase of for environment suggesting need million in the current oil price offshore well costs $ 40-60 $ 20-40 million while an drilling an onshore well costs drilling further activities. Among other costs, finance to being unavailability of funds more exploration activities 5%, the key impediment to estimates the same to beat been explored while Kenya 20% ofits oilresources have Uganda estimates that only Oil andGasSector inthe Growth Further sectors oftheeconomy. at industrial and transport power energy solutions both to the much-needed gas to to Kenya will be asolution pipeline from Dar Es Salaam region. In addition, the gas access to cheaper fuel in the suggesting possibility of easy Rwanda, Burundi, and Congo Kenya, Northern Tanzania, regions covering Western ofhis development within the one objectives was to support that clarified Uganda, President Museveni 33 UPSTREAM

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 O reopen. added production back as economies in April 2020, but has slowly at the height of the demand-sapping lockdowns and travel bans The oil producers’ group slashed production by almost 10m b/d balance theoilmarket. this group and will always work within this group” when trying to disagreements this month, the country remained “committed to UAE’s energy minister Suhail Al Mazrouei said that despite the raised by150,000b/dto4.8mand3mrespectively. (from 11m b/d today) while Iraq and Kuwait had their baselines Baselines for Saudi Arabia and Russia will both rise to 11.5m b/d will goupto3.5mb/dfromabout3.2matthemoment. capacity, production rising its reflect to failed it that complained Under the agreement, the UAE’s production baseline, which it clarity. disagreements and that the oil market would now have greater he believed the deal demonstrated the group could overcome Saudi Arabia’s Minister for Energy Prince Abdulaziz bin Salman said which hadthreatenedtoscupperadealearlythismonth. which output deals are calculated — in a victory for Abu Dhabi, will be awarded higher production baselines — the level from the United Arab Emirates, Saudi Arabia, Russia, Iraq and Kuwait, As part of the agreement, members of the Opec+ group, including about 2mb/dintotalbytheendofyear. day from August 2021 to December 2022, ramping up output by An agreement was reached to pump an extra 400,000 barrels a daysofthepandemic. during theearly UPSTREAM pec+ members finally reached a deal that will raise oil will a target of December 2022 for restoring all the output cut that adeal production in response to soaring prices. Opec + also set reached finally members pec+ 34 OPEC+ ReachDealtoIncreaseOil Production in check”saidAmrita,SenatEnergyAspects. 400,000 b/d each month after May 2022, which will keep supplies complicate matters a guaranteeing bit but the group is practically market anddrawing down inventory. Thebaseline changes “This is a sign that Opec+ is keen tocontinue managing the next year. own production could rise above 11m b/d in the second half of Prince Abdulaziz indicated that under this plan, Saudi Arabia’s continue untiltheendof2022. 400,000 b/d said, production but the increases monthly will The existing baseline will remain in place until that time, Opec+ when theoriginaldealexpiresinApril2022. though it is unlikely to lead to higher production until next year, baselines appears calculated to avoid a split in the wider group, The decision to increase other large members’ production compromise. Talks this for the week with Saudi Arabia laid the groundwork core Opecgroup. the mostpowerful with member of the Saudi Arabia traditionally month and revealed a faultline between Abu Dhabi and Riyadh, The UAE’s complaints over baselines had thwarted a deal this as demandisexpectedtokeep rising. will be enough to significantly damp prices in the coming months, It isuncertain whether the amount of volumerestored by Opec+ with traderswarning thatthemarket istighteningrapidly. three-year high above $75 a barrel as demand has recovered, Brent crude, the international oil benchmark, has soared to a returnedbytheendof2022. expected tobelargely About 5.8m b/d of output remains off the market, but that level is S between 15,000and20,000km2. and 25,000km2, with most comprising the map and range between 4,000 The available blocks are shown on Ministry ofPetroleum. and evaluated based on setcriteria bythe selected blocks, which will be facilitated The bidding round will be for a number of high-quality investors andpartners. mechanisms, the Ministry seeks to attract and government the new data, analysis, in returning to peace and stability. With progress significant following operators welcome back experienced partners and and Malaysia. The country is hoping to home to oil and gas majors from China investors to aregion that is already interest from a diverse group of foreign The Oil Licensing Round aims to attract international investors. opportunities to unprecedented providing remain unexplored, and gas reserves of South Sudan’s oil 90% approximately by the Ministry, commissioned new analysis According to the parties. and counter- investors, operators data for interested compiled crucial and has since hydrocarbons new with potential exploration blocks identified The ministry Oil Licensing Round. first country’s launch of the announced the Sudan, with another four oil exploration operating producing blocks in South there are three consortiums Currently Sudan Oil &GasExplorationin South JUBA: Ministry ofPetroleumLaunches JUBA: Ministry Petroleum Ministry of outh Sudan Political progressandstabilityseesSouthSudanopenupenergysectorforinvestment First OilLicensingRound 3 2 1 sharing contracts. companies having acquired production

Free Blocks: Awarded ExplorationBlocks: Producing Blocks: Blocks: C1,C2 Blocks: B1,B4 Blocks: A1,A2, A3,A4,A5,A6 Petroleum Corporation(10%equity) Block B2-Strategic Fuel Fund, Nile Corporation (10%equity) Block 5B - Ascom, Nile Petroleum Petroleum Corporation(10%equity) Block B3 – Oranto Petroleum, Nile Corporation (8%equity) Company: Petronas, Nile Petroleum Block 5A – Sudd Petroleum Operating Petroleum Corporation(5%equity) Petroleum Corporation, Petronas, Nile Operating Company: China National Block 1,2&4–Greater Pioneer Petroleum Corporation(8%equity) Petroleum Corporation, Petronas, Nile Operating Company: China National Block 3 and 7–DAR Petroleum the foreseeable future of Africa’s fastest-growing countries in path and is expected to continue as one developmental apositive on back firmly the country’s states. South Sudan is now follow-up agreement overgovernance of Unity (TGNU) in February 2020, and the of the Transitional Government of National in the country following the establishment conflict, and foothold a gaining finally is instability peace lasting of years After international roadshow. of data presentations, followed by an of Petroleum will host a virtual series is concluded by August 2021, the Ministry Once the expression of interest process southsudanlicensinground.com providing contact details online at www. 2021, by expressing their interest and Ministry of Petroleum until August 23 request all relevant information from the Potential investors are now able to 4

First LicensingRound: Blocks A2,A5, B1,B4,D2 Blocks: E1,E2 Blocks: D1,D2 REGIONAL NEWS 35 rd

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 U REGIONAL NEWS that initially landed inDaresSalaam, that initially fuel that confirmed Wakasenza Stephen The Railway acting Managing Director shipments aftera16-yearhiatus. products across Lake Victoria, resuming delivery of 500,000 liters of petroleum Uganda Railways Corporation began a trial Dar esSalaamandTanga. competition from the Tanzanian ports of growing off stave to fighting been already cargo is sent to Uganda. Mombasa has three-quarters of the terminal’s transit Kenya’s Mombasa port, since about imports could jeopardize business for The potential move to diversify its Uganda toExplor ways tocutitsrelianceonKenya. alternative route for its fuel imports ganda is exploring Tanzania as an We withMombasa,butasa country we arecomfortable 36 need analternativerouteforstrategicreasons, Its FuelImports build a crude-export pipeline via Tanzania. until 2025. The government intends to own oil production, but unlikely to happen Plans are underway forUganda to start its journalists. for strategic reasons,” Wakasenza told as acountry we needan alternative route “We are comfortable with Mombasa, but nations. chains to the landlockeddisrupted supply rocked East Africa’s biggest economy in 2007 when post-election violence that on the Kenyan port came into sharp focus and Tanzania. The region’s over-reliance Democratic Republic of Congo, Rwanda Mombasa also serves South Sudan, the the giantfresh-water lake. before being sent onward to Uganda over transported by train to Mwanza port e A lternative Routefor

registered vessel. a month fromKisumu, and a Tanzania- supplies about 4 million to 6million liters on a Kenyan-owned boat which already vessel under repair. In addition, it will rely director, who said it also has a second 10 voyages amonth, according tothe capable of hauling 880 tons and making The state-owned company has a tanker Wakasenza said. liters once itimports additional wagons, It’ll seek toboost capacity to 40 million of 10 million to 20 million liters a month. Kenya’s Kisumu port -- bringing in atotal from Tanzania’s Mwanza port and from to use tworoutes across Lake Victoria Uganda petroleum statistics. URC aims it trucked through Kenya, according to rise at an annual rate of 7%with most of month and the demand continues to 185 million liters offuel products every Uganda’s fuel consumption is about an annualrateof7%. demand for petroleum imports is rising at route from other importers as Uganda’s suggesting there maybeinterest in the International Ltd., Wakasenza said, The trial fuel cargo was forStabex Rising Demand * the ExciseDutyActeffectiveon1 October2020. The newrateshavebeenadjusted fortheaverageinflationrate2019/2020financialyear of4.94%inaccordancewithSection10 dated 1stOctober2020publishednewexcisedutyratesoncertain excisablegoodswithspecificrates. Aviation Spirit (Gasoline) Premium Motor Spirit (Gasoline) Regular Motor Spirit Spirit Type JetFuel Point &White Spirit Special Boiling Preparations Other Light Oilsand crudes) (including topped refined Partly Fuel Kerosene type Jet and preparations Other Medium oils Kerosene (IK) Illuminating engines). and stationery low speedmarine heavy,black for Diesel Oil(ind speed engines). amber for high (automotive, light, Gas Oil Other Gas Oils 125 cst. Residual Fueloils Petroleum Gas(LPG) Liquiefied 180 cst. Residual Fueloils 280 cst. Residual Fueloils Other residual fuels Petroleum Bitumen gases) Butanes (Petroleum Batching oils greases Lubricating Lubricating oils Bituminous mixures sands oil shaleandtar Bituminous or The CommissionerGeneral(“CG”) oftheKenya RevenueAuthority(“KRA”) videLegislativeSupplementNo.107LegalNoticeNo194of2020 Import Import 10% Duty 10% 25% 25% 25% 10% ------of Excise Duty Former Rate Kshs/Litre 20.9196 20.9196 20.5095 20.9196 10.8357 10.8357 8.9378 8.9378 1.5247 6.0514 5.5730 3.8906 6.6245 0.3155 0.6309 0.6309 0.6309 of Excise Duty Petroleum Taxes CurrentRate Kshs/Litre 21.9530 21.9530 21.5227 21.9530 11.3710 11.3710 9.3793 9.3793 1.6000 6.3503 5.8483 4.0827 6.9517 0.3310 0.6621 0.6621 0.6621 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% 16% VAT 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% 8% - Mainten. 18.00 18.00 18.00 Road Levy ------Devel. Levy Petroleum Kshs/Litre 0.40 5.40 5.40 0.40 0.40 0.40 5.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 0.40 ------Current Rate Decl. Fee of Import of Import 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Development Railway 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Levy Kshs/Litre Remission 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.45 0.45 0.45 0.45 0.45 0.45 37 SOURCE: KRA Adulteration Kshs/Litre STATISTICS 18.00 Levy ------

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 STATISTICS 38 100.00 120.00 20.00 40.00 60.00 80.00 -

Aug-16 Year 2018-2020 Aug-20 May-21 Aug-19 May-20 May-19 Dec-20 Dec-19 Sep-20 Sep-19 Feb-21 Feb-20 Feb-19 Nov-20 Jun-20 Nov-19 Jun-19 Jan-21 Jan-20 Jan-19 Mar-21 Mar-20 Mar-19 Oct-20 Oct-19 Apr-21 Apr-20 Apr-19 Jul-20 Nov-16 Jul-19

Feb-17 Crude OilPriceTrend

May-17 USD/KSHS TREND OIL CRUDE and USD/KSHS Mean Exchange Rates (KES/US$) Rates Exchange Mean Aug-17

Nov-17 Mean ExchangeRates(KES/US$) Feb-18

May-18 Crude OilAnalysis 103.31 101.89 101.20 101.12 100.17 101.30 103.44 100.47 109.63 109.67 109.89 110.52 110.36 109.14 106.65 106.83 101.27 100.97 101.32 103.55 104.05 103.79 107.61 107.84 106.48 107.93 107.46 108.6 Aug-18 102.2

Nov-18

Feb-19

May-19

Crude Prices Crude Aug-19

Nov-19

Feb-20 Crude Prices 63.94 65.16 61.61 55.27 49.57 43.04 40.16 42.35 44.28 36.34 23.52 69.25 35.58 62.30 66.15 64.80 72.35 73.05 66.35 60.95 68.60 45.74 17.64 62.44 67.71 56.1 66.6 63.6 May-20 67.8

Aug-20

Nov-20

Feb-21

May-21 PRODUCT Super Petrol Automotive Diesel Kerosene PRODUCT Super Petrol Automotive Diesel PRODUCT Kerosene Super Petrol Automotive Diesel Kerosene PRODUCT Super Petrol Automotive Diesel PRODUCT Kerosene Super Petrol Automotive Diesel Kerosene PRODUCT Super Petrol Automotive Diesel Kerosene PRODUCT Super Petrol Automotive Diesel Kerosene PRODUCT Super Petrol Automotive Diesel PRODUCT Kerosene Super Petrol Automotive Diesel Kerosene PRODUCT Super Petrol Automotive Diesel Kerosene MOMBASA 124.72 105.27 95.46 MOMBASA 124.72 105.27 MOMBASA 95.46 123.95 105.27 95.46 MOMBASA 120.41 105.27 MOMBASA 95.46 120.41 105.27 95.46 MOMBASA 112.78 99.52 90.05 MOMBASA 104.60 94.01 84.75 MOMBASA 104.43 89.43 MOMBASA 81.17 103.45 88.31 79.25 MOMBASA 104.86 90.53 81.37 Maximum pumpprices(15thNovember2020to14thDecember2020) Maximum pumpprices(15thDecember2020to14thJanuary 2021) Maximum pumpprices(15thOctober 2020to14thNovember2020) Maximum pump prices (15th January 2021 to 14th February 2021) Maximum pumpprices(15thJanuary2021to14thFebruary Maximum pumpprices(15thFebruary 2021to14thMarch2021) Maximum pump prices (15th July 2021to14thAugust2021) Maximum pumpprices(15thJuly Maximum pumpprices(15thMarch2021to14thApril2021) Maximum pumpprices(15thJune2021to14thJuly2021) Maximum pumpprices(15thMay2021to14thJune2021) Maximum pumpprices(15thApril2021to14thMay2021) Pump Prices NAIROBI 127.14 107.66 97.85 NAIROBI 127.14 107.66 NAIROBI 97.85 126.37 107.66 97.85 NAIROBI 122.81 107.66 NAIROBI 97.85 122.81 107.66 97.85 NAIROBI 115.18 101.91 92.44 NAIROBI 106.99 96.40 87.12 NAIROBI 106.82 91.82 NAIROBI 83.56 105.85 90.70 81.63 NAIROBI 107.27 92.91 83.73 NAKURU 126.75 107.55 97.76 NAKURU 126.75 107.55 NAKURU 97.76 125.98 107.55 97.76 NAKURU 122.44 107.55 NAKURU 97.76 122.44 107.55 97.76 NAKURU 114.85 101.81 92.36 NAKURU 106.69 96.31 87.08 NAKURU 106.53 91.76 NAKURU 83.52 105.56 90.63 81.59 NAKURU 106.96 92.85 83.69 ELDORET 127.67 108.46 98.68 ELDORET 127.67 108.46 ELDORET 98.68 126.90 108.46 98.68 ELDORET 123.36 108.46 ELDORET 98.68 123.36 108.46 98.68 ELDORET 115.77 102.74 93.29 ELDORET 107.62 97.23 88.00 ELDORET 107.45 92.67 ELDORET 84.43 106.48 91.56 82.51 ELDORET 107.89 93.77 84.61 KISUMU 127.67 108.46 98.68 KISUMU 127.67 108.46 KISUMU 98.68 126.90 108.46 98.68 KISUMU 123.36 108.46 KISUMU 98.68 123.36 108.46 98.68 KISUMU 115.76 102.73 93.28 KISUMU 107.61 97.23 87.99 KISUMU 107.45 92.66 KISUMU 84.43 106.48 91.55 82.51 KISUMU 107.88 93.77 84.60 39 STATISTICS

2nd Quarter, April - June 2021 2nd Quarter, April - June 2021 STATISTICS calculating VAT onpetroleumproducts,whichbecame effectiveon15 Petrol, dieselandkerosene pricesinthe15 excluding IDFfeesandRailway Development Levy. Therefore, thebasisofcharging VAT atthepointofentryincludesCIFvalue, theapplicablecustom of VAT nowincludesexciseduty, feesandothercharges inlinewiththeEastAfricanCommunityCustomsManagement Act(EACCMA). 2021 to14 was assentedtoon25 NOTE: Retail PricesinNairobi Taxes andLevies (d) OMC Margins(c) Distribution andStorageCosts(b) Products Costs(a) Summary Retail PricesinNairobi(a)+(b)(c)(d) Taxes andLevies(d) Value AddedTax (VAT) DeclarationFee Import Merchant ShippingLevy Anti-adulteration Levy Railway Regulatory Levy Petroleum Regulatory Levy Petroleum DevelopmentLevy Road MaintenanceLevy Excise Duty Oil Marketing CompaniesMargins(C) Dealers Margin Margin Importers Storage anddistribution(b) within40kmsofNairobi Delivery Depot Losses Pipeline Losses Road Transport (Msa-Nrb)-Bridging Pipeline Transport (Msa-Nrb) Landed Cost(a) Cost Item Thecomputationofpumppriceshastaken intoaccountthechangeseffectedbyTax Laws(Amendment)Act, 2020 which th 40 July 2021)pricingdespitearisein crudeoilcosts. July th Breakdown ofthecostsSuperPetrol(PMS),Diesel(AGO)andKerosene (DPK)inNairobi: April2020.AllthechangesinActbecameeffectiveonthat date,exceptthechangeinbasisof EPRA PetroleumPrices th July toAugust14 July Tax Levy Levy Levy Levy Levy Levy Levy Tax Retail OperatingMargin Retail Investment Margin Wholesale Delivery topetrolstations Delivery 0.5% PMS,0.3%ForDPK&AGO) (0.25%) Pipeline (0% PMS,AGO&IK) Road (100% PMS,AGO&IK) Pipeline Weighted averagecostforallimports Cost Description 15

th

June2021to14 th 2021periodremainedunchanged fromthepreviousmonth’s (15 th May2020.WhiletheVAT was retainedat8%, thecalculation th July 2021 July 57.87 12.39 3.29 53.59 Super Petrol KShs/Litre 127.14 57.87 12.39 3.29 127.14 9.42 1.79 0.03 0.00 1.03 0.25 5.40 18.00 21.95 0.54 0.51 0.08 0.00 2.16 53.59 Kshs/Litre Super Petrol s dutyandexcisetaxbut 45.98 8.00 3.04 50.64 KShs/Litre Diesel 107.66 45.98 8.00 3.04 107.66 8.30 1.67 0.03 0.00 0.96 0.25 5.40 18.00 11.37 0.54 0.27 0.07 0.00 2.16 50.64 Kshs/Litre Diesel 40.32 6.04 3.01 48.48 KShs/Litre Kerosene 97.85 40.32 7.72 1.62 0.03 18.00 0.93 0.25 0.40 0.00 11.37 97.85 6.04 3.01 0.54 0.24 0.06 0.00 2.17 48.48 Kshs/Litre Kerosene SOURCE: th June EPRA PERFORMANCE F critical engine parts andprovideupto40%betterwearprotection.** critical engineparts pressureandtemperatureconditionstoprotectallthe Adapts todifferent **Based on OM646LA engine test andcompared with ACEA A3/B4 specification LEXIBILITY TOGETEXTRA DRIVE ON 41

2nd Quarter, April - June 2021 DELTA KEEPS YOU MOVING

GALANA