The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) AFRICA EAST | Kenya | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 11 | ARCHIVED on 20-Nov-2020 | ISR43886 | Implementing Agencies: Government of Kenya, MoPM, The National Treasury, Ministry of Industry, Trade, and Cooperatives Key Dates Key Project Dates Bank Approval Date: 24-Jul-2014 Effectiveness Date: 02-Oct-2014 Planned Mid Term Review Date: 16-Jul-2018 Actual Mid-Term Review Date: 31-Jan-2018 Original Closing Date: 30-Jun-2021 Revised Closing Date: 30-Jun-2021 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective (PDO) is to strengthen the capacity of the GoK to manage its petroleum sector and wealth for sustainable development impacts. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component A: Petroleum Sector - Reforms and Capacity Building:(Cost $49.76 M) Component B: Revenue and Investment Management - Reforms and Capacity Building:(Cost $0.63 M) Component C: Sustainable Impact of Oil and Gas Industry - Reforms and Capacity Building:(Cost $1.68 M) Component D: Project Management:(Cost $4.49 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions KEPTAP project development objective (PDO) is to strengthen the capacity of the GoK to manage its petroleum sector and wealth for sustainable development impacts. Over the life of the project, now in its 6th year of implementation, a series of accomplishments can be noted in light of the project’s key outcome indicators have provided clarity in the development, regulation and management of the oil and gas sector in the country. A series of accomplishments can be noted in light of the project’s key outcome indicators: (1) local content policy for the oil & gas sector, (2) gender assessment for the sector, (3) adoption of a transparency and accountability framework and action plan for the petroleum sector, (4) occupational safety health guidelines for the petroleum sector, (4) design of the institutional framework of a petroleum sector regulating agency, (4) LGP study for domestic distribution plan, (5) Geoscience data acquisition, (6) transaction advice for recoverable costs audit, and (7) access to transaction and technical advisors for negotiations with the operator. 11/20/2020 Page 1 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) KEPTAP restructuring started in July 2019 with the objective of collapsing project implementation teams (PITs) under PMU at the Ministry of Petroleum and Mining (MoPM) to improve procurement and project management as well as extending support to the State Department of Mining – an aspect which was subsequently dropped. The restructuring process has resulted in improved project management. The Covid-19 crisis and its related restrictions and other project constraints will likely delay the completion of project activities especially those that require physical engagement to implement. These include Transaction Advisor (MoPM), GIS Mapping of Storage Facilities and Service Stations (EPRA) Transformation Plan (NOCK), Petroleum Master Plan (MoPM), Road Hazards Management Plan (EPRA) and Land Access and Acquisition Framework (MoPM). Due to the upcoming closing date of the IDA financing in February 2021, it is imperative to focus attention on the implementation of strategic activities and focus attention on ensuring the sustainability of capacity building efforts. The project hired a number of technical advisors to support institutional development of government agencies. It is imperative for the Ministry to decide how those skills will be kept after the project’s closing and how they will be retained on the Government’s payroll. On a sectoral level, The Turkana Early Oil Production System (EOPS) is delayed and the production start date will be beyond 2021 and a new date has not be set since Tullow Oil (the principal operator) is relinquishing its East Africa operations by successfully selling its entire interests in the Lake Albert Development Project in Uganda in April 2020. In May 2020, Tullow Oil’s exit intentions became clearer soon after in Kenya by its declaration of force majeure on its Turkana operations. The GoK has since rejected the force majeure declaration and is in negotiation with Tullow to resolve the issue. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Substantial Substantial Macroeconomic -- Low Low Sector Strategies and Policies -- Substantial Substantial Technical Design of Project or Program -- Substantial Substantial Institutional Capacity for Implementation and -- Substantial Substantial Sustainability Fiduciary -- Moderate Moderate Environment and Social -- Moderate Low Stakeholders -- Substantial Substantial Other -- -- -- Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes Strengthen the capacity of the GoK to manage its petroleum sector and wealth for sustainable develop IN00905724 ►Policy, legal and regulatory acts, prepared under the project, approved and in force (legally effective) by relevant sector ministries (Text, Custom) 11/20/2020 Page 2 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Baseline Actual (Previous) Actual (Current) End Target Petroleum Act 2019 & new Model PSA in force. Energy & Petroleum Petroleum Act 2019 & Policy 2019 in force new Model PSA in force. Development of a Energy & Petroleum stand-alone Petroleum Policy 2019 in force Policy. Contract Development of a stand- signed, under alone Petroleum Policy. implementation. Contract signed, under Development of implementation. Upstream petroleum Development of regulations. Contract Upstream petroleum signed, under regulations. Contract implementation. signed, under Review of mid and implementation. downstream petroleum Review of mid and on-going. downstream petroleum The first Occupational on-going. Safety and Health The first Occupational Key Policy and Legal No acts prepared under (OSH) Regulation for Value Safety and Health (OSH) Acts approved and in the project the sector petroleum Regulation for the sector force completed petroleum completed Review of Review of Environmental Environmental Regulations on-going. Regulations on-going. Development of Development of Resettlement Policy Resettlement Policy Framework - completed Framework - Draft Sovereign Wealth completed Fund (SWF) Bill - with Draft Sovereign Solicitor General for legal Wealth Fund (SWF) drafting. Bill - with Solicitor Development of oil & gas General for legal standards consultancy drafting. temporarily – on going Development of oil & gas standards consultancy temporarily – on going Date 01-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 The development of policies and regulations have been/are being conducted through broad-based consultations with all stakeholders that have included private sector, public participation, government institutions, sector players, and civil society organisations. Technical Committee (comprised of representatives from different agencies) have coordinated and Comments: supervised the delivery of the different outputs. The Petroleum Act 2019 is in its legislative window for possible amendments IN00905725 ►Staff of petroleum sector management institutions trained to regulate, manage and monitor compliance in the sector (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 746.00 742.00 80.00 Date 01-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 11/20/2020 Page 3 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) As a whole, a total of 742 staff (ERC=65, MOPM=302, NEMA=164, DOSHS=26, OAG=42, KRA=98, KEBS=10, KMA=35) agencies of the government of Kenya have received training support in different Comments: fields related to oil and gas. The results have so far significantly exceeded both mid and end term targets. IN00905736 ►Percentage of petroleum production and transmission projects per year subject to formal environmental and safety inspections following good international practices set under the project (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 01-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 Central Processing Facility and Marine Terminal will be subject of Environmental and Safety inspection when they fall due. Given the delays in the delivery of Project Oil Kenya, the related projects have not fully developed to be Comments: subjected to the formal environmental and safety inspections as guided by the good international practices set under KEPTAP. IN00905737 ►Report published, and made publicly available, in accordance with internationally recognized transparency standards. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target TA framework Value No reporting TA framework completed report published completed Date 01-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 A transparency and accountability (TA) framework in the oil and gas sector, the first in any economic sector in Kenya, has been developed. The planned for the implementation of TA recommendations, will Comments: not be going ahead due to non-availability of the requisite budget. Intermediate Results Indicators by Components Component B: Revenue and Investment Management - Reforms and Capacity Building IN00905739 ►Number of staff trained at Treasury to forecast, collect, and manage oil revenues. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 274.00 274.00 10.00 Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 So far 274 staff members (from Kenya Revenue Authority=98, Office of the Auditor General=42, the National Treasury=83, Central Bank of Kenya=17 and Commission for Revenue Allocation=34) who are beneficiaries under Revenue and Investment Management Reforms were trained in different courses on oil revenues management. Comments: The results have so far significantly exceeded both mid and end term targets. Training scheduled for 2019/2020 has been adversely affected by the covid-19 restrictions –no trainings have been conducted so far in 2020. IN00905741 ►Number of staff from MEP, NOCK, ERC, KPC, OAGDJ and Petroleum Authority that have completed sector-relevant training funded through the KEPTAP project (Number, Custom) 11/20/2020 Page 4 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 547.00 547.00 60.00 Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 535 staff received preliminary training in 40 different programmes. (MOPM=302, NOCK=48, ERC=65, KPC=92, OAGDJ= 28). Some of the project sponsored training included petroleum project economics & risk analysis, introduction to petroleum exploration and production, international petroleum law, fire safety in oil and gas terminals, oil pipeline welding, production sharing agreements among others. Comments: The results have so far significantly exceeded both mid and end term targets. Training scheduled for 2019/2020 has been adversely affected by the Covid-19 restrictions –no trainings have been conducted so far in year 2020. IN00905744 ►Number of staff from DOSHS and other lead agencies responsible for enforcement of safety and health regulation in the sector (e.g. ERC, Petroleum Authority) that have completed sector-relevant trainin (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 379.00 379.00 10.00 Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 379 staff received preliminary training in 22 different programmes (DOSHS=26, MOH=73, NEMA=164, NDOC=8, CSOs=40, ERC=65 ) The trainings programmes include international technical certificate in oil & gas operational safety; environmental and social risk management; occupational health & hygiene in the oil & gas sector; oil & chemical spill management offshore and onshore; environmental management and Comments: pollution control in the oil sector; environmental auditing; and basics of non-destructive testing. The results have so far significantly exceeded both mid and end term targets. Training scheduled for 2019/2020 has been adversely affected by the covid-19 restrictions –no trainings have been conducted so far in 2020. Component C: Sustainable Impact of Oil and Gas Industry - Reforms and Capacity Building IN00905742 ►A dedicated gender assessment identifying any potential gender-specific impacts of the sector is completed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Gender Assessment finalized but the scope reviewed to upgrade the assessment. No gender assessment Gender Assessment Gender Assessment Value Consultant hired and available finalized. finalized assignment ongoing. Interim report received and cleared. Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 Initial gender assessment finalized. A new consultant has been hired to upgrade and deepen the scope of the gender assessment. Interim Comments: report received and cleared. IN00905745 ►Number of public agencies plus organizations engaged in transparency and community monitoring trained on transperancy monitoring across the extractive sector value chain (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 11/20/2020 Page 5 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Value 0.00 136.00 136.00 15.00 Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 CSOs 16 trained 80 Turkana- county CBOs trained on environmental and social risk monitoring. 40 members of Turkana Grievances Management Committee trained on management of environmental and social issues pertaining to O&G development. Comments: Other relevant training which they participated in was Environmental and Social Impact Assessment for oil and gas sector 7 Petroleum Development and Community Liaison Officers have been positioned in Turkana. IN00905747 ►Local content policy approved and effective (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Draft Local Content policy and local Local Content policy Value No Local content policy content regulations Policy legally in force developed delivered awaiting government approval. Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 Overarching local content policy and regulations for oil and gas developed. Awaiting formal Government Comments: (Cabinet) approval. Component A: Petroleum Sector - Reforms and Capacity Building IN00905738 ►Fiscal policy rule in place for transfer of oil/gas revenue to the annual budget (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No Fiscal policy on transfer of oil/gas revenues A procedure manual No Fiscal policy on for Petroleum Tax Fiscal rule in place Value transfer of oil/gas Fiscal Rule is in place. Administration Office and enforced revenues for Kenya Revenue Administration is completed Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 Certain fiscal aspects are embedded in the new 2019 Model Petroleum Sharing Agreement. Comments: Provision in Petroleum Act 2019 cover establishment of a Consolidated Energy Fund. IN00905743 ►A comprehensive stand-alone Petroleum Policy that covers both upstream and downstream aspects approved and effective (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Energy & Petroleum Energy & Petroleum Policy 2019 in force No stand-alone Policy 2019 in force Value Development of a PP legally in force Petroleum Policy (PP) Development of a stand- stand-alone Petroleum alone Petroleum Policy at Policy contracted and 11/20/2020 Page 6 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) contract negotiations has moved to stage. implementation stage with virtual kick-off meeting already conducted. Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 Development of a Petroleum Policy at contract negotiations stage. Comments: IN00905746 ►A new regulatory body for the petroleum sector, "Kenya Petroleum Authority", reporting to the Cabinet Secretary of MEP, is established and functional (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Consultancy on Interim UPRA team in institutional place development of First deliverable Consultancy on Upstream Petroleum issued (e.g.Field institutional development Kenya Petroleum Regulatory Authority Development Plan Value of UpstreamPetroleum Authority does not exist coming to a close. reviewed/approved, Regulatory Authority on- Final report received exploration license going. Interim report awaiting technical approved, etc.) received. committee review and approval. Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 Currently UPRA is not anchored in the Petroleum Act 2019. With the current legislative amendment window, UPRA is one of the proposals to be included in the eventual amendment of the Act. Comments: Currently the Ministry of Petroleum and Mining is handling upstream regulatory affairs and the Energy and Petroleum Regulatory Authority the mid - and downstream regulation of petroleum products. IN00905748 ►NOCK is restructured in order to execute its mandate as a National Oil Company that may take commercial positions in oil and gas license as well as represents the State Participation in Joint Ventures (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target NOCK is not restructured Consultancy on NOCK transformation plan is NOCK Transformation NOCK is fully Value NOCK is not restructured on-going with the Plan over 50% restructured consultant currently undertaking phase 2 of the assignment. Date 31-Dec-2014 25-Mar-2020 16-Oct-2020 28-Feb-2021 A consultant has been hired to support NOCK to develop and implement a Transformation Plan. The Plan is envisaged to be a 15-year long-term strategic blueprint that is aligned to the country’s development agenda. Comments: Phase 1 of the assignment is completed and approved by the technical committee. The consultant has embarked on phase 2 of the task. Component D: Project Management IN00905740 ►Operating cost do not exceed 15% of total project cost by the closing date of the project (Percentage, Custom) 11/20/2020 Page 7 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 10.00 10.00 15.00 Date 11-Jan-2019 25-Mar-2020 16-Oct-2020 28-Feb-2021 The PMU related costs are expected to reduce relative to the total actual project expenses as more payments are made for the maturing consultancy contracts, for instance, reduced operational cost in Comments: procurement evaluations. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P145234 IDA-55260 Effective USD 50.00 50.00 0.00 31.84 13.67 70% P145234 TF-A3418 Effective USD 6.70 6.70 0.00 5.44 1.26 81% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145234 IDA-55260 Effective 24-Jul-2014 14-Aug-2014 02-Oct-2014 28-Feb-2021 28-Feb-2021 P145234 TF-A3418 Effective 24-Jul-2014 16-Nov-2016 16-Nov-2016 30-Jun-2021 30-Jun-2021 Cumulative Disbursements 11/20/2020 Page 8 of 9 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History Level 2 Approved on 12-Oct-2016 ,Level 2 Approved on 18-Dec-2019 Related Project(s) There are no related projects. 11/20/2020 Page 9 of 9