Wetang’ula says his law firm acted in Sh800m oil deal

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By NATION TEAM newsdesk@ke.nationmedia.com
Posted  Wednesday, March 28  2012 at  22:00

Cabinet minister Moses Wetang’ula has denied that a company linked to him sold a block of land where oil was discovered in Turkana county for Sh800 million.

But he did admit that his former law firm was involved in the transaction in which block 10BB was sold by Turkana Drilling to Africa Oil of Canada.

Tullow Oil, which struck the black gold, later acquired a 50 per cent stake in the Africa Oil.

The Nation on Wednesday reported that a company associated with a Cabinet minister was involved in the sale of the block. It did not name the minister in question. (READ:Minister’s firm sold Turkana oil block for Sh800m)

According to a report by Capital FM News, the newly appointed Trade minister said he retired from the firm — which he established in 1983 — nine years ago, when he was first appointed to the Cabinet.

The Sirisia MP said he had not enjoyed any financial benefits from the firm, which however continues to bear his name, since he is no longer a partner.

He challenged those in doubt to review the records, saying Kenyans should investigate the claims and refrain from accepting unsubstantiated claims.

“If I had Sh800 million, everyone would know. Perhaps I would have bought a plane that would make my campaigns easy or maybe I would have bought a building and earn rent so as to stop the hustle of Nairobi. I would be living differently,” he quipped.

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He defended the law firm saying the lawyers were just doing their job.

There was no law barring Kenyans from engaging in such transactions, he added.

“Lawyers represent robbers but does that mean that they become accomplices to robbers? I mean, just because lawyers represent murderers does that make them murderers,” he argued.

The minister’s response came as the government warned that it would repossess oil exploration blocks leased out to companies on which no activity is taking place.

The companies affected also stand to lose commitment fees running into millions of shillings that they put up in bank guarantees when receiving their leases.

“It has been disappointing to note that some of the licensed oil companies have failed to demonstrate serious commitment in executing the minimum work and expenditure obligations in their respective blocks,” Energy permanent secretary Patrick Nyoike said in a speech read for him at an energy conference in Nairobi on Wednesday.

“My caution to such companies is that time is running out for them and they will not get any time extension.”

He did not name the companies but said the ministry hag already communicated with them.

The Turkana Drilling transaction had been described as an example of how small firms might be using influence in government to make hundreds of millions of shillings by trading in oil prospecting licences.

The business of acquiring blocks appears to have been invaded by influence peddlers and well-connected middlemen. 

President Kibaki on Wednesday said the oil discovery was expected to accelerate national development.

Speaking after the swearing in of new Cabinet ministers in Nairobi, the Head of State said the future was bright.

Investors from all over the world, he said, were keen to establish ventures in Kenya.

“We recently discovered oil. This is a good development. It will help supplement our development efforts,” the President said.

And Gichugu MP Martha Karua called for prudent management of natural resources.

He declined to give details of how the company acquired the block, referring queries to the Energy ministry.On Wednesday, the managing director of Tullow Oil, Mr Martin Mbugua, said Block 10BB was co-owned by Tullow Oil and Africa Oil on a 50:50 basis.

“Before such equity changes hands, the minister of Energy has to give consent. The ministry keeps track of who was initially awarded the contract,” said Mr Mbugua.

Ms Karua said lack of transparency in management of natural resources had led to conflicts in Africa.

Speaking at Narc Kenya headquarters on Wednesday, Ms Karua said oil contracts should be scrutinised.

“We must have a transparent system to manage the resource and its revenue,” she said.

The Extractive Industry Transparency Initiative (EITI) has stipulated a set of principles as a guide to increased transparency and participation of the public in such matters.

Ms Karua urged the government to join EITI at this very early stage, saying with poor governance oil could result in conflicts.