Business

Kenya to licence Uganda National Oil Company, resolving diplomatic feud

Energy Cabinet Secretary Davis Chirchir. (Photo:X)

By Bashir Mohammed | Thursday, March 28, 2024

The feud between Kenya and Uganda had escalated to the regional court, with Uganda seeking a licence to utilise KPC's infrastructure.

After months of diplomatic tensions and legal battles, Kenya has announced plans to licence the Uganda National Oil Company (Unoc), signalling a resolution to the protracted feud between the two East African nations.

Energy Cabinet Secretary Davis Chirchir revealed on Wednesday that efforts are underway to issue a permit allowing Unoc to directly import fuel through the Kenya Pipeline Company (KPC).

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Chirchir emphasised the collaborative nature of the arrangement, highlighting the utilisation of Kenya's infrastructure for mutual benefit.

“We will see how to work together because usage of our pipeline is an opportunity for us. The transporter will remain KPC. We are working closely with Uganda to resolve the challenge,” stated Chirchir.

The confirmation of Unoc's licensing follows the recent withdrawal of a case filed by petitioners at the High Court in Machakos to prevent the Energy and Petroleum Regulatory Authority (EPRA) from issuing the permit.

Unoc's entry into Kenya as a direct fuel importer is expected to impact local oil firms, but KPC will not suffer revenue losses as Unoc will continue to utilize its storage facilities and transport network to ship fuel to Uganda.

The feud between Kenya and Uganda had escalated to the regional court, with Uganda seeking a licence to utilise KPC's infrastructure.

However, delays ensued as Unoc failed to obtain a licence from EPRA, prompting Kenya's energy regulator to cite non-compliance with legal requirements.

Despite these challenges, Uganda had explored alternative routes through neighbouring Tanzania to facilitate direct fuel imports.