The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) AFRICA | Kenya | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 9 | ARCHIVED on 25-Sep-2019 | ISR38024 | Implementing Agencies: Government of Kenya, Ministry of Energy, Ministry of Petroleum and Mining 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 $45.67 M) Component B: Revenue and Investment Management - Reforms and Capacity Building:(Cost $6.65 M) Component C: Sustainable Impact of Oil and Gas Industry - Reforms and Capacity Building:(Cost $5.12 M) Component D: Project Management:(Cost $3.47 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 This ISR summarized the outcomes from the mission (November 10 to 17, 2018). ISR ratings are updated/revised following the conclusion of the mission. Overall Progress of KEPTAP: Progress has been made over the last several months in project implementation. The project has had significant improvement on progress towards achieving the PDO rating, which remains as Moderately Satisfactory. The team expects that momentum will be maintained to complete a number of activities that are still delaying the progress of the project in terms of achieving its development objective. A number of key targets have been improved over the reporting period. 9/25/2019 Page 1 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) There has been progress on key petroleum sector developments. The Petroleum Act was enacted by the President on March 29, 2019. The Act stipulates that there will be one regulatory authority for up-, mid- and downstream regulation by March 29, 2020. The first regulation supported by KEPTAP, the Occupational Health and Safety Regulations (OHSR) for the petroleum sector, is close to being finalized with a potential for legal endorsement by the end of 2019. A total of 742 staff agencies of the government of Kenya have received training support in different fields related to oil and gas. The Draft Bill on the Kenya Sovereign Wealth Fund Bill, 2019 and draft Kenya Sovereign Wealth Fund Policy that provide for a framework for management of natural resource revenues have been published. Underway are consultancies to develop. The local content policy and regulations work continued largely as planned with a near-to final draft local content policy and accompanying regulations presented to stakeholders for review. The policy is now largely complete. Environment Safeguards. The Ministry is on course to implement key recommendations of the Strategic Environmental and Social Assessment (SESA) which was successfully prepared through the KEPTAP project and as covenant. A number of studies and assignments are ongoing. The environmental safeguards capacity at the Project Management Unit is considered adequate. 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 Sustainability -- Substantial Substantial Fiduciary -- Moderate Moderate Environment and Social -- Moderate Moderate 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 IN00727987 ►Policy, legal and regulatory acts, prepared under the project, approved and in force (legally effective) by relevant sector ministries (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Petroleum Act 2019 & Draft Petroleum Bill and new Model PSA in Key Policy and Legal No acts prepared under draft National Energy Value force. Acts approved and in the project Policy submitted to Energy & Petroleum force parliament for approval. Policy 2019 in force 9/25/2019 Page 2 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Petroleum policy at Development of a procurement stage. stand-alone Petroleum Upstream, mid and P olicy at contract downstream regulations negotiations stage. at procurement stage. Development of Occupational Safety and Upstream petroleum Health (OSH) Regulation regulations at contract consultancy on-going signing stage (under implementation). Review of mid and Review of Environmental downstream petroleum Regulations ongoing on-going. The first Occupational Safety and Health (OSH) Regulation for the sector completed Review of Environmental Regulations on-going. Development of Resettlement Policy Framework ongoing Draft Sovereign Wealth Fund (SWF) ready for parliamentary approval. Draft Sovereign Wealth Fund (SWF) Policy ready for parliamentary approval. Development of oil & gas standards consultancy on hold Date 01-Dec-2014 11-Jan-2019 12-Sep-2019 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 organizations. Comments: Technical Committee (comprised of representatives from different agencies) have coordinated and supervised the delivery of the different outputs. The Petroleum Act 2019 is in its legislative window for possible amendments. IN00727988 ►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 0.00 592.00 742.00 80.00 Date 01-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 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. IN00727989 ►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 9/25/2019 Page 3 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Value 0.00 0.00 0.00 50.00 Date 01-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 Central Processing Facility and Marine Terminal will be subject of Environmental and Safety inspection Comments: when they fall due. IN00727990 ►Report published, and made publicly available, in accordance with internationally recognized transparency standards. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No reporting No reporting No reporting report published Date 01-Dec-2014 11-Jan-2019 12-Sep-2019 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 future assignment “Implementation of TA recommendations” Comments: will guide in the writing of the report. Intermediate Results Indicators by Components Component B: Revenue and Investment Management - Reforms and Capacity Building IN00728007 ►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 43.00 274.00 10.00 Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 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 Comments: beneficiaries under Revenue and Investment Management-Reforms were trained in different courses on oil revenues management. IN00728011 ►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) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 496.00 535.00 60.00 Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 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 includes petroleum project economics & Comments: 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. IN00728014 ►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 0.00 415.00 379.00 10.00 9/25/2019 Page 4 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 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 Comments: oil & gas sector; oil & chemical spill management offshore and onshore; environmental management and pollution control in the oil sector; environmental auditing; and basics of non-destructive testing. Component A: Petroleum Sector - Reforms and Capacity Building IN00728006 ►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 No Fiscal policy on No Fiscal policy on Fiscal rule in place Value transfer of oil/gas transfer of oil/gas transfer of oil/gas and enforced revenues revenues revenues Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 Certain fiscal aspects are embedded in the new 2019 Model Petroleum Sharing Agreement. Provision in Petroleum Act 2019 cover establishment of a Consolidated Energy Fund. A procedure manual for Comments: Petroleum Tax Administration Office for Kenya Revenue Administration is under development. A design of fiscal framework for National Treasury will be procured. Fiscal rule in place IN00728010 ►The score of Public Expenditure and Financial Accountability Assessment (PEFA) Performance Indicator (PI) 6 (comprehensiveness of information included in budget information) improved (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value C C C B Date 31-Dec-2014 11-Jan-2019 11-Jan-2019 28-Feb-2021 This indicator will be dropped on the Restructuring that is currently being processed. Comments: IN00728013 ►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 Policy 2019 in force Development of a No stand-alone Value No Petroleum Policy (PP) stand-alone Petroleum PP legally in force Petroleum Policy (PP) Policy at contract negotiations stage. Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 Development of a Petroleum Policy at contract negotiations stage. Comments: IN00728016 ►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 Upstream Petroleum Interim UPRA team in First deliverable Kenya Petroleum Regulatory Authority place issued (e.g.Field Value Authority does not exist (UPRA) is provided for in Consultancy on Development Plan the Draft Petroleum Bill institutional reviewed/approved, 9/25/2019 Page 5 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) which has been development of exploration license submitted to parliament UpstreamPetroleum approved, etc.) for approval. Regulatory Authority on-going. Interim report received. Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 The reporting and mandate may change given the current wording of the Petroleum Bill with one year transition period. Currently the Ministry of Petroleum is handling upstream regulatory affairs and the Comments: Energy Regulatory Commission the mid - and downstream regulation of petroleum products. IN00728018 ►NOCK is restructured in order to execute its mandate as a National Oil Company that ma 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 NOCK is fully Value NOCK is not restructured NOCK is not restructured restructured restructured Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 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 Comments: agenda. NOCK has proposed a revision to the scope of transformation plan. Component C: Sustainable Impact of Oil and Gas Industry - Reforms and Capacity Building IN00728008 ►Multi-year perspective in fiscal planning, expenditure policy and budgeting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The majority of important investments are selected on the Multi-year budget Multi-year budget Multi-year budget basis of relevant sector formulation in place, but formulation in place, but formulation in place, strategies and no clear process of no clear process of but no clear process of recurrent cost Value investment project investment project investment project implications in selection and recurrent selection and recurrent selection and recurrent accordance with sector cost budgeting cost budgeting cost budgeting allocations and included in forward budget estimates for the sector. Date 31-Dec-2014 11-Jan-2019 11-Jan-2019 28-Feb-2021 This indicator will be dropped on the Restructuring that is currently being processed. Comments: IN00728012 ►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 No gender assessment Gender assessment Gender Assessment Value finalized but needs available finalized finalized review of scope Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 Gender assessment finalized. Comments: A consultant is however in the process of being hired to upgrade to expand and deepen the scope of the assessment. 9/25/2019 Page 6 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) CSOs 16, Turkana CBOs 40 trained on environmental and social risk monitoring. Other relevant training which they participated was Environmental and Social Impact Assessment for oil and gas sector. 40 individuals from Turkana CBOs trained. More training will be done after finalization of the Transparency and Accountability Framework. IN00728015 ►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 Value 0.00 5.00 5.00 15.00 Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 CSOs 16, Turkana CBOs 40 trained on environmental and social risk monitoring. Other relevant training which they participated was Environmental and Social Impact Assessment for oil and gas sector. 40 individuals from Turkana CBOs trained. Comments: 4 Petroleum Development and Community Liaison Officers have been positioned in Turkana. More training will be done after finalization of the Transparency and Accountability Framework. IN00728017 ►Local content policy approved and effective (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Draft Local Content policy and local Value No Local content policy No Local content policy content regulations Policy legally in force delivered awaiting government approval. Date 31-Dec-2014 11-Jan-2019 12-Sep-2019 28-Feb-2021 Overarching local content policy and regulations for oil and gas developed. Awaiting formal Government Comments: approval. Component D: Project Management IN00728009 ►Operating cost do not exceed 15% of total project cost by the closing date of the project (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 16.69 9.00 15.00 Date 11-Jan-2019 11-Jan-2019 12-Sep-2019 28-Feb-2021 The PMU related costs are expected to reduce relative to the total actual project expenses as more Comments: payments are made for the maturing consultancy contracts. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed 9/25/2019 Page 7 of 8 The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) P145234 IDA-55260 Effective USD 50.00 50.00 0.00 22.16 22.82 49% P145234 TF-A3418 Effective USD 6.70 6.70 0.00 3.08 3.62 46% 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 Restructuring History Level 2 Approved on 12-Oct-2016 Related Project(s) There are no related projects. 9/25/2019 Page 8 of 8