For Online E-newspaper
The East African : Nov 10th 2014
16 The EastAfrican NEWS NOVEMBER 8-14,2014 SEEKING REDRESS Vanoil was stopped from oil exploration activities by the government of Kenya. Picture: File Canadian oil firm could sue Kenya for loss Company wants ≥estitution fo≥ seven yea≥s of explo≥ation activities afte≥ licences we≥e ≥evoked By KENNEDY SENELWA Special Correspondent Kenya for at least $150 million as restitution for seven years of exploration activities carried out in blocks 3A and 3B in Garissa, after the plots’ licences were revoked by the government in February. The Canadian firm owned C the two blocks under production sharing contracts (PSCs) signed with the Kenyan government in 2007. Last month, Vanoil com- menced an international arbitration against Kenya to resolve the dispute. Last year, Energy Cabinet Secretary Davis Chirchir said exploration terms for blocks 3A and 3B of Vanoil Energy would not be extended because of failure to comply with the PSC signed with the government in October 2007. Vanoil was unable to sink Madogashe well in 3A in Garissa County from August. After work started in July 2013, local people demanded a trust fund of $500,000 be set up, among other demands, for the rig to continue drilling. The average cost of drilling a well onshore in Kenya is $25 million, and licensed prospecting firms pay $50,000 per day to hire a rig. Vanoil’s chairman James anadian oil firm Vanoil Energy Ltd could sue Passin said drilling of Madogashe-1 well in block 3A started before July 31, 2013, and that operations were significantly impaired by incidents of local disturbance and unrest. The company was directed by local government authorities to reduce and then delay operations until a safe return to the site could be provided. Vanoil was expected to drill two wells in the acerage located in Anza basin. “The company’s decision to proceed with a formal arbitration demand follows prolonged discussions with Kenyan officials regarding an extension of PSCs in order to accommodate lengthy delays experienced at the drill site,” said Mr Passin. Vanoil’s board of directors has instructed the management to immediately review all operations to eliminate non-essential costs, dispose of non-productive assets and secure sufficient funds for the legal suit. Chief executive officer Don Padget said the firm aims to reduce costs by 75 per cent. “Our new plan will allow the company to focus on reaching a full and fair settlement with the Republic of Kenya for the loss of money, time and opportunity experienced over the past several years,” he said.
Nov 3rd 2014
Nov 17th 2014