Petroleum Contracts and Taxation: is East Africa Prepared?
Thuo, Daniel Njoroge
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The challenges that are faced by gas and oil exploration and production companies in Africa are enormous, ranging from gang extortion in local communities to government regulation and taxation. The East African region (Kenya, Uganda and Tanzania) have not been traditional producers of oil and gas. However, with the recent developments in the discovery of oil and gas deposits and commercial extraction slated in the near future, these countries need to be preparing for changing manpower requirements, fiscal policies and new regulations to exploit the benefits brought about by oil and gas production. At the same time the governments must seek to prevent the oil curse from afflicting the region. The governments in the region have been at the forefront in awards of contracts and improving the oil and gas policy and legislation. It is therefore important for these three countries to learn from countries with efficient regulatory and taxation policies to fossil fuel development in the energy exploration and production sector. The model countries discussed herein include Trinidad and Tobago, Indonesia and Norway. These countries provide learning points that can be used in developing fiscal policy conducive for oil and gas exploration and production.