The World Bank wants Kenya to make crude oil and natural gas exploration agreements signed with prospecting firms public.

A new regulatory framework proposed by World Bank consultants proposes that the country move away from a tradition of keeping deals made with mining, oil and gas explorers private.

The World Bank’s final report has recommended that Kenya adopt the practice of publishing exploration agreements by modifying the current confidentiality provision of the model production sharing contract to provide a clause for public disclosure.

The recommendations by the team hired by the Ministry of Energy will see a review of the Petroleum Exploration and Production Act of 1986, which sets out the model production sharing contract for signing agreements with exploration firms.

Consulting firm Hunton & Williams with Challenge Energy Ltd, who were hired by the World Bank and Kenya, said the country needs to publish as much petroleum sector information as feasible to enhance transparency.

Kenya is also set to adopt open tendering in awarding exploration licences as more foreign players show interest in the recently discovered natural gas and oil.

Up to now, Kenya has adopted a first-come first-served basis for issuing licences, an approach that has been criticised because it gives mining rights to well connected speculators who make billions of shillings by selling them to real investors.

Kenya had up to February issued 780 exploration and mining licences. Some 10 sites are set for petroleum drilling this year alone. Kenya’s new Constitution requires all new oil and gas exploration rights negotiated with Ministry of Energy to be ratified by parliament.

READ: Is Kenya getting it right?

The consultants have also proposed that Kenya publish new and existing production sharing contracts only to the extent permissible under the applicable confidentiality provisions.

The information to be made public could include regulator rulings, monthly production data, field development plans, transfers of interest, results from bidding rounds, and revenue allocation calculations.

Hunton’s lead consultant John Beardworth said the information can be made accessible through the Internet, which would improve competition and result in more favourable terms for the government.

“Greater transparency improves the attractiveness of a country’s petroleum sector, in part because investors have more confidence in the stability of a regime when more information is available,” said Mr Beardworth.

“Although historical practice in the industry was to treat oil and gas agreements with confidentiality, many petroleum producing countries now publish their PSCs,” said Steve Husbands, a consultant at Challenge.

The World Bank wants Kenya to start embracing a global initiative of promoting accountability in managing revenues following the discovery of oil onshore and gas offshore ahead of production to avoid the resource curse.

Publishing requirement

The global Extractive Industries Transparency Initiative (EITI) requires mining firms to publish payments made to governments and to make public revenues received for audit and monitoring.

EITI monitors and reconciles company payments and government revenues. Each signatory country owns the process, which is overseen by participants from the government, companies and national civil society.

Kenya has become a hotspot for oil and gas exploration, as well as other minerals like gold, attracting explorers and financiers keen to tap into mineral, oil and gas wealth.

READ: Kenya’s oil exploration now renews hopes of a major discovery

Early this July, British oil and gas exploration firm Tullow said that it had doubled its previous estimates of net oil pay from the Ngamia 1 and Twiga South wells, both in Kenya, to 200 metres and 75 metres respectively.

On July 19, mineral explorer Cortec announced it had found rare earth deposits at Mrima Hill, in the county of Kwale, worth $62.4 billion. The area also has Nobium deposits estimated to be worth $35 billion, the new projections show.

READ: Cortec invests $90m to mine niobium in Kenya