Page 13 - AfrOil Week 11 2023

AfrOil POLICY AfrOil

ADNOC, Aramco, ENOC win Kenyan fuel

supply tenders after nationalisation

KENYA KENYA has taken a drastic move to address a a significant plunge of reserves below the stat-
worsening foreign exchange reserve crisis after utory requirement of four months of import
nationalising fuel imports, a development that cover.
is expected to ease demand for US dollars and The government, however, contends that
shore up reserves. it has not abolished the OTS, considering that
The East African nation announced the in the new Petroleum Importation Regula-
operationalisation of a government-to-govern- tions, procuring petroleum products through
ment fuel importation plan after awarding Saudi a government-to-government arrangement is
Aramco, Emirates National Oil Co. (ENOC) deemed to have occurred through the OTS.
and Abu Dhabi National Oil Co. (ADNOC) The measure to arrest a further drop in
contracts to supply petroleum products over reserves comes when Kenya’s trade balance has
the next six months. been widening with the monthly average deficit,
Saudi Aramco will supply the country with expanding from $984.3mn in 2019 to $1.19bn
diesel, while ADNOC and ENOC will supply last year.
gasoline and kerosene respectively. The three Fuel has been a key contributor to the wid-
companies were selected out of seven that had ening deficit, given that in 2022 the average
presented bids in a tender floated two weeks ago. monthly import bill for petroleum products was
The first cargo of fuel from the arrangement $476.3mn, compared to $269.5mn in 2019. This
is expected to arrive next month and will be used means that fuel is a major component of Kenya’s
in the April-May pricing cycle. Kenya sets the total import bill, having increased from an aver-
pricing of retail fuel prices in the middle of every age of 18.3% in 2019 to 26.1% last year, thus put-
month. ting significant pressure on dollar demand. ™
“The proposed transaction is expected to
alleviate the demand for US dollars driven
by petroleum imports by extending the time
required to source for dollar liquidity from the
current five days to 180 days,” said Energy Cab-
inet Secretary Davis Chirchir.
He added that the heavy demand for the
greenback that was coming from oil marketing
companies (OMCs) necessitated the Kenyan
government to take the drastic intervention
of nationalising imports in order to secure an
extended credit period in settling fuel import
payments.
Before the move, Kenya was spending
$500mn each month to pay for petroleum
product imports through the open tender sys-
tem (OTS), a practice that has contributed to Fuel imports have contributed significantly to Kenya’s total import bill (File Photo)

PROJECTS & COMPANIES
Energean brings NEA/NI gas fields on line

EGYPT UK-BASED Energean has announced the start drilled in water depths of 30-85 metres at NEA/
of natural gas production at the North El Amriya NI before the end of 2023, it noted.
and North Idku (NEA/NI) fields offshore Egypt. The NEA/NI site lies in shallow waters off the
In a statement, the company explained that coast of Egypt and contains an estimated 39mn
development operations had begun with the barrels of oil equivalent (boe) in proven and
successful production of gas from the NEA#6 probable (2P) reserves, with gas accounting for
well. Three additional wells are expected to be 88% of the total.

Week 11 16•March•2023 www. NEWSBASE .com P13