The State Department for Petroleum was established by the Executive Order No. 1 of 2023 on Organization of the Government of the Republic of Kenya as one of the two State Departments under the Ministry of Energy and Petroleum. The State Department has existed in various forms in the past. Initially, it existed as Petroleum Exploration Unit, being one of the three Units under Geo-Exploration Department in the then Ministry of Energy. In 2010, the Unit was elevated to a Department renamed Petroleum Energy Department and later to a Directorate in 2012 and renamed Petroleum Directorate.

The Executive Order No. 1 of 2013 on Structure of the National Executive placed the Directorate under the Ministry of Energy and Petroleum as one of the four Technical Directorates; in 2015, the Directorate was elevated to State Department for Petroleum in the same Ministry. In 2018, the State Department was moved to the Ministry of Petroleum and Mining as one of the two State Departments, which were later merged in 2020, to form two Functional Areas namely: Petroleum Functional Area and Mining Functional Area. The Petroleum Functional Area was for a second time elevated to a State Department in 2023 and placed under the Ministry of Energy and Petroleum.

Exploration History

Petroleum development has a long history in Kenya. The importation of petroleum products into the country began in the early 1900s while petroleum exploration dates to the 1950s. However, the first commercially viable oil discovery was made in 2012 in the Tertiary Rift, followed by significant gas discoveries in the offshore Lamu Basin and onshore Ansa Basin. The oil and gas industry's value chain consists of upstream, midstream, and downstream.

a) Upstream: entails the process of exploration, development and production of crude oil and natural gas;
b) Mid-stream: entails transportation and storage of refined petroleum products as well as storage, refining and transportation of crude oil,
c) Downstream: ensures refined petroleum products are made available to the consumers through supply and distribution

The State department for Petroleum:

Following the re-organization of the Government of the Republic of Kenya vide Executive Order No. 1 of January 2023, the State Department for Petroleum is established under the Ministry of Energy and Petroleum. The State Department for Petroleum is headed by PS  Mohammed Liban and it has two directorates;

1. Directorate of Petroleum headed by the Commissioner Petroleum (CP)
2. Directorate of Administration and Support Services headed by Secretary Administration (SA)

The functions of Petroleum include:

• Initiate, develop, and review policies, strategies and programs in the oil and gas sector.
• Coordinate oil and gas operations between related agencies.
• Develop and review modalities and strategies for licensing of petroleum blocks.
• Design and develop national petroleum programs, systems, standards and regulations for oil and gas.
• Develop and update oil and gas master plan for exploration, develop, produce, and market the petroleum products.
• Develop systems for monitoring and evaluation of programs and projects in the oil and gas sector.
• Maintain and manage petroleum data; monitor activities in the oil and gas sector to ensure compliance with regulations.
• Facilitate capacity building in areas relating to oil and gas operations; conduct surveys relating to the economy, efficiency and effectiveness of the downstream industry.
• Ensure compliance with Environmental Protection and Management Regulations in liaison with the relevant agencies.
• Ensure local content capacity building in line with national policy goals.
• Negotiate and manage Production Sharing Contracts.
• Execute agreements with purchasers for the export of crude oil and natural gas.
• Protect the interests of consumers and petroleum service providers.
• Review proposed annual work programs and production forecasts submitted by contractors.
• Undertake research on policy and programs related to oil and gas.
• Administration of domestic marketing of petroleum products, natural gas transmission/sales, petrochemical manufacture and other natural gas-based industries.
• Formulation and implementation of legal instruments for the petroleum industry.
• Acquisition, analysis and dissemination of both local and international petroleum information.
• Representation of the interests of Kenya at international petroleum fora and institutions.
• Long term planning, development and implementation of policy initiatives in the petroleum sector.
• Sharing of the management of the State’s interests and assets in the oil and gas industry.

There are three State Agencies under the State Department namely:

• Kenya Pipeline Company (KPC),
• National Oil Corporation of Kenya (NOCK)
• Kenya Petroleum Refineries
• Petroleum Development Levy Fund

There are three State Agencies under the State Department namely:

• Kenya Pipeline Company (KPC)
• National Oil Corporation of Kenya (NOCK)
• Kenya Petroleum Refineries Limited (KPRL)
• Petroleum Development Levy Fund