Appendix I THE ENERGY ACT, 2006 (No. 12 of 2006) In exercise of the powers conferred by section 102 of the Energy Act, 2006 the Minister for Energy makes the following regulations:- The Energy (Licensing of Petroleum Businesses) Regulations, 2011 Citation Interpretation No. 12 of 2006 Chapter 496 1. These Regulations may be cited as the Energy (Licensing of Petroleum Businesses) Regulations, 2011. 2. In these Regulations, unless the context otherwise requires "Act" means the Energy Act, 2006; Kenya Standard means a specification or code of practice declared by the Council under section 9 of the Standards Act. License means any document or instrument in writing granted under the Act by the Commission to any person authorizing the importation, exportation, refining, transportation, storage, distribution and sale of petroleum. Licensee means any person holding a license granted by the Commission. Chapter 265 agent means a person appointed in writing by the Commission to be a licensing agent for purpose of issuing licenses under the Act. Local Authority means a local authority as defined in the Local Government Act. Modification means any change in the facility that alters the existing design.
Open tendering system means a system of competitive bidding which applies to the importation into Kenya of crude oil and petroleum products as prescribed by the Minister from time to time. Petroleum logistics facility means any facility that is or can be used to receive, store, load, offload or transport petroleum in bulk but does not include retail dispensing sites. Petroleum business means a concern carrying on the importation, exportation, refining, storage, transportation or sale of petroleum Petroleum pipeline system means a system of pipes that is used for transportation of petroleum in bulk over distance and any apparatus and works associated therewith. Retail dispensing site means premises where petroleum is stored in bulk in one or more tanks and dispensed to consumers for their own use and includes filling and service stations. Application 3. These regulations shall not apply to the Kenya Defence Forces. Prohibition against construction without a permit 4. (1) A person shall not construct or undertake modification of a petroleum pipeline, refinery, bulk storage facility or retail dispensing site except in accordance with the Act, these Regulations, and the terms and conditions of a valid construction permit issued by the Commission or its agents. (2) The Commission or any authorized person acting on its behalf may enter and inspect any premises or facility that the Commission
believes is under construction for purposes of undertaking a petroleum business. (3) Where the Commission determines that a person is engaged in the construction for purposes of undertaking a petroleum business requiring a construction permit under these regulations and is not in possession of such permit it shall direct that person to cease the activity unless and until the requisite construction permit is obtained. Application for a construction permit 5. (1) A person who wishes to construct a petroleum pipeline, refinery, bulk storage facility or retail dispensing site shall make an application to the Commission or its agents for a construction permit in the form set out in Part 1 of Schedule A. (2). An application under paragraph (1) shall be accompanied by the documentation and information specified in Part 2 of Schedule A. (3) In evaluating an application for a construction permit, the Commission or its agents shall be satisfied that the applicant has complied with the Act and these Regulations, and that the information and documents submitted with the application form are true and correct. (4) The Commission or its agents may request additional information from an applicant that may be necessary to enable the Commission to make a decision regarding the issuing of the construction permit. (5) The Commission or its agents shall consider the application within forty five (45) days after receipt of an application for a
construction permit which meets the requirements of the Act and these Regulations. (6) The construction permit issued under these regulations shall be in the form set out in Part 3 of Schedule A. (7) Where the Commission or its agents refuses to grant a construction permit, it will notify the applicant of such refusal specifying the reasons and shall deliver such notice to the applicant at the address provided to the Commission by the applicant. Suspension or revocation of a construction permit 6. (1) A construction permit ceases to be valid if a) The permit is suspended or revoked by the Commission for non compliance with any term or condition thereof within the prescribed period by notice in the Gazette; or b) Execution of the works has not commenced at the expiry of twelve months from the date on which the construction permit was granted or the expiration of any extended period which the Commission may allow. (2)The Commission or its agents shall notify the holder of the construction permit of the Commission s intention to suspend or revoke the construction permit at least twenty one days before the intended date of suspension or revocation, specifying the reasons. (3) The Commission or its agents may in writing reinstate a construction permit suspended or revoked if it is satisfied that the reasons for suspension or revocation no longer exist. Prohibition against conducting a petroleum business without a licence 7. (1) A person shall not conduct any business of importation, refining, exportation, wholesale, retail, storage or transportation of petroleum except in accordance with the Act and terms and
conditions of a valid petroleum business licence issued by the Commission or its agents. (2) Where the Commission or its agents determines that a person is engaged in a business of importation, refining, exportation, wholesale, retail, storage or transportation of petroleum requiring a petroleum business licence under these regulations and is not in possession of such licence it shall direct that person to cease such business until such time as the person obtains the required licence. (3)The Commission or its agents may issue separate or combined licences in respect of any of the activities prescribed in paragraph (1) above. Application for a petroleum business licence 8. (1) A person who wishes to apply for a petroleum business licence or renewal shall make an application to the Commission or its agents in the form set out in Part 1 of Schedule B; (2) The application under paragraph (1) shall be accompanied by the documents and any additional information specified in Part 2 of Schedule B. Consideration and determination of the application 9. (1) In evaluating an application for a petroleum business licence, the Commission or its agents shall take account of the criteria in Part 3 of Schedule B and be satisfied that the applicant has complied with the Act, and the information and documents submitted with the application form are true and correct. (2) The Commission or its agents may request additional information from an applicant that may be necessary to enable the Commission to determine the application.
(3) The Commission or its agents shall decide on an application within thirty (30) days after receipt of an application for a licence which meets the requirements of the Act and these Regulations (4) The licence issued under paragraph 9 shall be in the form set out in Part 4 of Schedule B. Duration of Licence 10. (1) A petroleum business licence issued under the Act shall be valid for one year from the date of its issue and may be renewed in accordance with the provisions of the Act. (2) An application for renewal of a petroleum business licence shall be made to the Commission or its agents at least thirty (30) days before the expiry date. Inquiries by the potential licensee 11. (1) The Commission or its agents shall furnish all persons interested in filing applications for any of the licences prescribed under these Regulations with such information in the Commission s or its agents possession as is necessary for the application. (2) Any discussions with, notifications or requests for information from the Commission or its agents shall not confer any right to any person to the grant of a license. Obligations of a petroleum business licensee 12. A petroleum business licensee shall: (a) Operate its petroleum business facilities in a manner prescribed by the Act and applicable regulations made under any other law; (b) Require that third parties, including any contracted petroleum road transportation licensee, using or servicing its facilities comply
with the Act and all applicable regulations made under any other law; (c) Maintain minimum operational stocks of petroleum as may be prescribed by regulations made under the Act; (d) Participate in the Open Tendering System to meet its petroleum requirements, in accordance with Regulations made under the Act; (e) Only use licensed petroleum logistics facilities for logistics services; (f) Refine petroleum at a licensed refinery as may be prescribed by the Minister from time to time. (g) Adhere to Kenya Standards for petroleum products; (h) Use petroleum road tankers that comply with Kenya Standards, have valid petroleum permits issued under the Act and comply with Regulations and use petroleum road tanker drivers who are certified for that purpose under the Act; (i) Purchase petroleum only from other petroleum business licensees or a licensed petroleum refinery, except in the case of importation of petroleum; (j) Sell petroleum in Kenya only to other petroleum business licensees, or end users for own consumption; (k) Not to discriminate between customers or classes of customers regarding access or conditions of service;
(l) Submit information to the Commission as required under the Act and any Regulations made there under; (m) Inform the Commission or its agents in writing of any changes of directorship or address or telephone number or other material particulars submitted as part of the application for the license within thirty (30) days of the relevant change taking effect; and (n) At all times comply with the Act and these Regulations and carry out the legitimate instructions of the Commission or its agents. Display of permit or licence 14. (1) A petroleum business license, or a certified copy thereof, shall be displayed in a prominent position on the premises in respect on which it is issued. (2) Any license issued in terms of these Regulations: (a) remains the property of the Commission; (b) may be suspended, revoked or amended by the Commissin at any time subject to compliance with the Act; (c) may not be tampered with or defaced in any manner; and (d) is not transferable without the written consent of the Commission. Inspections and investigations 15. The Commission or any authorized person acting on its behalf may enter and inspect any premises where petroleum business is conducted for the purposes of inspections or conducting investigations pursuant to the provisions of the Act or Regulations made under the Act. Revocation of licence 16. (1) The Commission or its agent may at any time revoke or suspend any licence issued under these Regulations if the licensee commits any breach stipulated in Section 85 of the Act.
(2) Unless otherwise specified in the license, the Commission or its agents may give the licensee fourteen (14) days to show cause why the license should not be suspended or revoked setting out the matters specified in the Act. (3)The Commission or its agents shall determine the matter within thirty (30) days from the expiry of the notice period. (4) Any suspension or revocation of licence shall not indemnify the licensee against any penalties for which the licensee may have become liable under the Act or these Regulations. (5) The suspension or revocation of the licence for contravention of its conditions is in addition to any other penalty which may be imposed under the Act or by any other written law. Amendment of licence 17. (1) Subject to the provisions of the Act, any person aggrieved by a condition and/or term imposed in the licence may, in accordance with the Act, in writing apply to the Commission or licensing agent to amend such condition or term. (2) If such a person is not the licensee the Commission or its agents shall in writing inform the licensee within seven (7) days of receipt of the application and the Commission or its agents will determine the matter within thirty (30) days. (3) A licence amended under the Act and these regulations shall retain the existing expiry date. Appeals 18. (1) A person aggrieved by the decision of the Commission or its agents in refusing to renew, amend, replace, grant a license or impose conditions on a licence or in suspending or revoking a
licence may appeal to the Tribunal within thirty (30) days of receipt by him of the written notification of such action. (2) A person aggrieved by the decision of a licensing agent in refusing to renew, amend, replace, grant a licence or impose conditions on a licence or in suspending or revoking a licence may appeal to the Commission within thirty (30) days of receipt by him of the written notification of such action. Penalties 19. Any person who contravenes any of these regulations commits an offence in accordance with the Act and shall on conviction be liable to a fine not exceeding one million shillings or to a maximum term of imprisonment of one year, or to both such fine and imprisonment. Dated the... 2011. KIRAITU MURUNGI Minister for Energy
THE ENERGY ACT, 2006 SCHEDULE A PART 1 APPLICATION FORM FOR A PETROLEUM INSTALLATION CONSTRUCTION PERMIT (A separate application form must be completed in respect of each separate installation) 1. Name of applicant/proponent: 2. Details of applicant/proponent: (a) Income Tax Personal Identification Number(s): (b) Postal address: (c) Email Address : (d) Site location : I. Plot No.: II. III. Street/Market: Town/County: 3. Give full details of proprietors or partners owning business or directors/shareholders of the company, as the case may be: Name Nationality (Where applicable No. of shares held) (Any additional information should be submitted on a separate sheet of paper)
4. Give full details of directors of the company: Name Nationality Passport/ ID No. (Any additional information should be submitted on a separate sheet of paper) 5. Full description of the proposed petroleum facility: 6. Specify the points between which the pipeline is to run (For Pipeline installations only): 7. Specify the storage capacity of the facility: 8. Give details on equity capital including other sources of financing: 9. Indicate bank references: 10. CONDITIONS FOR ISSUANCE OF A CONSTRUCTION PERMIT
Compliance with: (a) ENERGY ACT 2006. (b) Environmental Management and Co-ordination Act, 1999 and in particular the report of the Environmental (Impact Assessment and audit) Regulations, 2003. (c) Physical Planning Act, 1996. (d) Local Government Act. (e) Any other subsidiary legislation regulations from the above Acts. 11. DECLARATION i. I/We have read and understood the relevant sections of the Energy Act, No. 12 of 2006 and the related petroleum rules and regulations, and agree to abide with them. ii. iii. iv. I/We hereby certify that the information given above is to my/our knowledge true and accurate. I/We understand that it is an offence to give false information in an application for a construction permit. I/We hereby confirm that our Company/Business shall abide by the above terms and conditions with regard to construction of the petroleum installation. I also understand that the construction permit is subject to these conditions. Name of Company: Name and ID No. of Person signing The Declaration: Designation and telephone No.: Signature & Stamp: Date: Email address: 12. FOR OFFICIAL USE ONLY
1. Date application received: 2. Date of review: 3. Decision: 4. If application is deferred or rejected, date of letter advising applicant accordingly: 5. Permit details: No.: Date issued: Expiry date:
SCHEDULE A PART 2 INFORMATION AND DOCUMENTS TO ACCOMPANY APPLICATION FOR A CONSTRUCTION PERMIT Criteria REF PBSF PL RT Application form Yes Yes Yes Yes Three copies of approved plans and specifications Yes Yes Yes Yes Environmental Impact Assessment (EIA) Licence Yes Yes Yes Yes Certificate of compliance with Land Use Yes Yes Yes Yes KEY REF Refinery. PBSF Petroleum Bulk Storage Facility. RT Retail Dispensing Site. PL Pipeline.
SCHEDULE A PART 3 PERMIT NO. THE ENERGY ACT, 2006 PETROLEUM FACILITY CONSTRUCTION PERMIT Construction Permit is hereby granted to of P.O. Box to construct the following petroleum Facility (is): Construction of: 1. Petroleum Facility################ On premises situated at: Plot No. : Street/Market : Town/County : This Permit expires on : Conditions: 1... 2... 3... 4... Dated this: Signature: (SEAL) Director General Energy Regulatory Commission
SCHEDULE B: PART 1 THE ENERGY ACT, 2006 APPLICATION FORM FOR A PETROLEUM BUSINESS LICENCE (EXCEPT LPG) (A separate application form must be completed in respect of each separate business establishment) 1. Name of business/applicant: 2. Details of applicant: a) Income Tax Personal Identification Number(s): b) Postal address: c) Email Address : d) Location of business premises: I. Plot No.: Building Name: II. III. Street/Market: Town/District: 3. Give full details of proprietors or partners owning business or directors/shareholders of the company, as the case may be: Name Nationality (Where applicable No. of shares held) (Any additional information should be submitted on a separate sheet of paper.) 4. Give full details of directors of the company:
Name Nationality Passport/ ID No. (Any additional information should be submitted on a separate sheet of paper) 5. Full description of the business (es) for which the licence is required: 6. (a) Indicate the number and date of issue of any licence previously held under the Act: (b) Indicate the period for which the licence is being applied (maximum is one year from the date of issue): 7. State if you are or any of your partners/directors is an undischarged bankrupt (If so indicate the names): 8. (a) Has any previous application for a licence been rejected under the Act? (If so, give details): (b) Has any previous licence been cancelled under the Act? 1. (a) Criteria to be met for new application and for renewal of a licence is attached at the back of the application form. (b) Certified copies (by advocate / commissioner of oaths) of documents as per criteria specified above should be submitted together with the licence application.
10. CONDITIONS FOR PETROLEUM BUSINESS LICENCE IN KENYA a) Compliance with ENERGY ACT 2006 and any other subsidiary legislation regulation issued there under. b) Environmental Management and Co-ordination Act, 1999 c) Local Government Act. d) Traffic Act e) Relevant Kenya Standard on Petroleum Tankers f) Any other subsidiary legislation regulations from the above Acts. DECLARATION i. I/We have read and understood the relevant sections of the Energy Act, No. 12 of 2006 and the related regulations issued therein, and agree to abide with them. ii. iii. I/We hereby certify that the information given above is to my/our knowledge true and accurate. I/We understand that it is an offence to give false information in an application for a licence. iv. I/We commit to conduct an honest petroleum business. Name of Company: Name and ID of Person signing the Declaration: Designation and telephone No.: Signature & Stamp: Date: Email address:
FOR OFFICIAL USE ONLY 1. Date application received: 2. Date of meeting of Petroleum Licensing Committee: 3. Decision of Petroleum Licensing Committee: Members present: Signature 1. 2. 3. 4. 4. If application is deferred or rejected, date of letter advising applicant accordingly: 5. Date of review of application: Decision of Committee: Members present: Signature 1. 2. 3. 4. 6. Licence details: No.: Date issued: Expiry date:
SCHEDULE B PART 2 THE ENERGY ACT, 2006 QUESTIONNAIRE TO BE FILLED BY NEW APPLICANTS FOR A PETROLEUM BUSINESS LICENCE (EXCEPT LPG) 1. Name of applicant: 2. Nature of business (Sole Trader, Partnership, Private Company or Public Company): 3. Certificate of Incorporation/Registration Number and date: a) Country of Incorporation: b) Physical address: c) Postal address: d) Telephone/ fax: e) Email address: 4. Give full details of proprietors or partners owning business or directors/shareholders of the company, as the case may be: Name Nationality (Where applicable No. of shares held) (Any additional information should be submitted on a separate sheet of paper) 5. Give full details of directors of the company: Name Nationality Passport/ ID No.
(Any additional information should be submitted on a separate sheet of paper) 6. Give details on equity capital including other sources of financing: 7. Indicate bank references 8. Type of business required to be licensed (tick as appropriate): (i) (ii) (iii) (iv) (v) (vii) Refining Importation Exportation Wholesale Storage Specify any other 9. Indicate if you: (a) (b) Own storage facilities (If so, give details including location and capacity): Have hospitality/rental arrangement (If so, give details including copies of any agreements): 10. Do you intend to market your product locally? If Yes, (c) (b) Give the number and locations of Retails Outlets: Give the number and locations of Distribution Depots including their capacities: (c) If neither (a) nor (b) is applicable, explain: (d) Give details on how you propose to maintain the approved quality of your product:
11. (a) Give details of measures you have taken/you propose to take to ensure that the product you handle does not endanger life or pollute the environment: (a) Any additional information that the applicant wishes to give: (If space provided above is not adequate use plain paper where applicable and attach to this questionnaire) Name of Company: Name and ID No. of Person signing the Declaration: Designation and telephone No.: Signature & Stamp: Date:
SCHEDULE B PART 3 LICENCE EVALUATION CRITERIA FOR NEW PETROLEUM BUSINESSES (EXCEPT LPG) Criteria REF IMP EXP STO WH PL Application form Yes Yes Yes Yes Yes Yes Detailed Questionnaire Yes Yes Yes Yes Yes Yes Certified copy of Memo and Articles of association Yes Yes Yes Yes Yes Yes Certified copy of Certificate of Incorporation Yes Yes Yes Yes Yes Yes Certified copy of PIN registration certificate Yes Yes Yes Yes Yes Yes Certified copy of VAT registration certificate Yes Yes Yes Yes Yes Yes Certified copy of current Tax compliance Certificate Yes Yes yes yes Yes yes Identification documents for directors (ID/passport page 1 and 5) Yes Yes yes yes Yes yes Work permits for non-citizens / Entry permit class H Yes Yes yes yes Yes yes Certified copy of Lease agreement/premises ownership Yes Yes Yes Yes Yes Yes Letter from OSMAG confirming membership Yes Yes Yes Signed KPRL Processing Agreement Purchase of Minimum crude oil Yes Yes Letter from MOE confirming applicant Signed OTS Yes agreement for crude and refined products Supply agreement with licensed importer or supplier /letter Yes Yes of intent EIA Licence (if new)/ EA if existing Yes Yes Certified copy of Certificate of Compliance with Physical Yes Yes Planning Act Certified copy of Clearance Certificate form Chief Fire Officer Yes Yes Detailed approved drawings drawn to scale Yes Yes Certified copy of DOSHS certificate of registration Yes Yes
LICENCE EVALUATION CRITERIA FOR RENEWAL OF PETROLEUM BUSINESSES (EXCEPT LPG) Criteria REF IMP EXP STO WH PL Application form Yes Yes Yes Yes Yes Yes Copy of previous licence Yes Yes Yes Yes Yes Yes Proof that expired licence was utilised Yes Yes Yes Yes Yes Yes Certified copy of Current Tax compliance certificate Yes Yes yes yes Yes yes Proof of active OSMAG membership OSMAG letter Yes Yes Yes Proof of crude processing - KPRL letter Yes EA acknowledgement letter from NEMA Yes Yes Certified copy of Clearance certificate form chief fire officer Certified copy of DOHSS certificate of registration Yes Yes Yes Yes KEY REF Refining IMP Import EXP Export STO Storage & Loading WH Wholesale PL Pipeline,
SCHEDULE B PART 4 THE ENERGY ACT, 2006 PETROLEUM BUSINESS LICENCE No. ERC/PET/ Licence is hereby granted to of P.O. Box to carry on the following petroleum businesses: LICENCE NAME (EXCEPT LPG) On premises situated at: Plot No. : Building Street/Market Town/District : : : This licence expires on : Dated this: Signature (SEAL) Director General Energy Regulatory Commission