11 Social Licence to Operate in the Energy Transition Era …
347
relating to SLO. The section also discusses the administrative institutions that are responsible for oil and gas regulation in the countries and
their role in fostering SLO. Section 11.4 analyses the private sector and
international organizations efforts to achieve SLO, especially in situations where laws are lacking or wanting. Section 11.5 of this Paper offers
a conclusion on whether SLO issues are adequately addressed in the oil
and gas sectors in East Africa, and whether any further steps need to be
taken.
11.2 The State of Oil and Gas and SLO in East
Africa
In this section, we provide an economic background of oil and gas in the
3 East Africa countries of Kenya, Tanzania and Uganda. The section also
analyses examples of oil and gas projects that have been affected by SLO
in East Africa and demonstrate that failing to secure SLO can have a
significant impact on a company including widespread public criticism,
social conflict and costly damage to company reputation.
11.2.1 SLO Issues in Oil and Gas in Kenya
Kenya is the largest economy in the East Africa Community (EAC) in
terms of gross domestic product (GDP), and the country has positioned
itself as a major economic power in Sub-Saharan Africa.
17 In 2012, the
first commercially viable oil discovery was made. An estimate of over 4
billion barrels of crude oil reserves and 750 million barrels of recovery
oil have been encountered in the Lokichar sub-basin by Tullow Plc and
its partners.
18
17 In April 2018 the IMF estimated that the Kenyan economy would expand by 5.5% in 2018
and 6% in 2019, compared to 4.8% in 2017—Oxford Business Group. 2018. “The Report:
Kenya 2018”. https://oxfordbusinessgroup.com/kenya-2018, accessed May 27, 2020.
18 “Upstream—National Oil Corporation of Kenya”. 2019. Nationaloil.Co.Ke. https://nation
aloil.co.ke/upstream/.
‘Upstream—National Oil Corporation of Kenya’ (Nationaloil.co.ke). https://nationaloil.co.
ke/upstream/, accessed May 27, 2020.
347
relating to SLO. The section also discusses the administrative institutions that are responsible for oil and gas regulation in the countries and
their role in fostering SLO. Section 11.4 analyses the private sector and
international organizations efforts to achieve SLO, especially in situations where laws are lacking or wanting. Section 11.5 of this Paper offers
a conclusion on whether SLO issues are adequately addressed in the oil
and gas sectors in East Africa, and whether any further steps need to be
taken.
11.2 The State of Oil and Gas and SLO in East
Africa
In this section, we provide an economic background of oil and gas in the
3 East Africa countries of Kenya, Tanzania and Uganda. The section also
analyses examples of oil and gas projects that have been affected by SLO
in East Africa and demonstrate that failing to secure SLO can have a
significant impact on a company including widespread public criticism,
social conflict and costly damage to company reputation.
11.2.1 SLO Issues in Oil and Gas in Kenya
Kenya is the largest economy in the East Africa Community (EAC) in
terms of gross domestic product (GDP), and the country has positioned
itself as a major economic power in Sub-Saharan Africa.
17 In 2012, the
first commercially viable oil discovery was made. An estimate of over 4
billion barrels of crude oil reserves and 750 million barrels of recovery
oil have been encountered in the Lokichar sub-basin by Tullow Plc and
its partners.
18
17 In April 2018 the IMF estimated that the Kenyan economy would expand by 5.5% in 2018
and 6% in 2019, compared to 4.8% in 2017—Oxford Business Group. 2018. “The Report:
Kenya 2018”. https://oxfordbusinessgroup.com/kenya-2018, accessed May 27, 2020.
18 “Upstream—National Oil Corporation of Kenya”. 2019. Nationaloil.Co.Ke. https://nation
aloil.co.ke/upstream/.
‘Upstream—National Oil Corporation of Kenya’ (Nationaloil.co.ke). https://nationaloil.co.
ke/upstream/, accessed May 27, 2020.