Building Communities and Promoting Accountability

Preliminary Environmental and Socio-Economic Analysis with Policy recommendations of Block L4 and L13

The report was prepared by the Kenya Oil and Gas Working Group and the aim is to examine the proposed exploratory drilling project in blocks L4 and L13, outline associated potential environmental and social threats and propose policy recommendations with the logic that early identification of possible impacts promotes environmental sustainability in that anthropogenic factors do not interfere with natural environment but blends with it creating harmony.

Oil and gas exploration in blocks L4 and L13 whose operations are currently midway lie in the Juba basin, of coastal Kenya. They are both onshore and offshore meaning they traverse both land, the coastal shelf and deep waters. Combined they cover an estimated area of 7,814.7sqkm (L4 being the largest at 5,794.81sqkm and L13 covering 2,019.9sqkm)

Midway Resources International (MRI) owns 75% interest in the production sharing contract (PSC) of both blocks through its wholly owned subsidiary Zarara. Swiss Oil Holdings (SOHI) Gas Lamu Ltd. has 15 per cent stake in the acreage and National Oil Corporation of Kenya (NOCK) holds 10 per cent carried interest of the government. The PSC signed on December 3, 2008 had (SOHI) Gas Lamu Ltd. having 90 per cent equity and NOCK 10 per cent carried interest. SOHI on April 4, 2011 farmed out its 75 per cent to Zarara. The Ministry of Energy and Petroleum on November 27, 2015 granted Zarara 18-month license extension through to June 3, 2017 to the first additional exploration period of PSC for the two blocks.

Coastal and  Terrestrial Habitats

The exploration blocks occur in coastal and terrestrial zones occupied by very dense natural assets key among them: Mangroves; coral reefs; sea grass; forests; wetlands.These assets support rich habitats while providing a range of vital goods and services that underpin the local areas economy and the well-being of its people (e.g. by providing water, fuel, food and raw materials; supporting farming, fishing, grazing, tourism and recreation; absorbing waste and carbon, and protecting people from hazards such as drought, flooding and storms).

It is pretty difficult to attribute direct losses of natural assets to exploration at this juncture due to data gaps on precise mine locations and extent, however overlay analysis results suggests that over 219,000 ha of intact habitats (mainly mangroves, forests, coral reefs and seagrass beds) could be lost directly or indirectly with the ongoing exploration activities in the two blocks. Of particular concern is the potential loss of key marine habitats; mangroves 2,200 ha (78% in block L4), seagrass 4,901 ha (93% in block L4) and coral reefs 3,496 ha (99% in block L13).

Most of these assets are already in decline in the region due to human development activities like the LAPSSET development corridor, oil exploration among others and the impacts of this are already being felt. Further losses would undermine the ability of natural systems to sustain economic productivity and basic human needs, posing profound implications for ecosystem's future prosperity. The above statistics provide evidence that strict control should target offshore oil and gas exploration particularly where it might affect sensitive areas like the Pate Marine and Dodori Creek.

Block L13, L4 and IUCN Protected Areas results

Hydrocarbon exploration and production activities have potential to directly or indirectly affect the community and national reserves through loss of natural assets as the acreage covers key terrestrial and coastal protected areas. The result of the overlap analysis is positive and indicates that the two blocks overlap 8 IUCN protected areas of which 3 are National reserves, 5 are community nature reserves. In total, block L13 bares 1,494sqkm while block L4 accounts for 891sqkm cumulative threat areas on protected areas accordingly.

Protecting the Boni-Dodori Forest

The Boni-Dodori Forest is one of Kenya's Last remaining coastal forests globally recognized for their wealth in biodiversity and endemism, key species including the elephant, lions, buffaloes and coastal topi inhabit the forests. A rapid forest survey undertaken in 2008 established that the forest was a stronghold for the Ader's duiker (a rare forest antelope sp

ecies). The Aders' duiker is threatened by habitat loss and fragmentation, and hunting for bush meat. Population estimates show that over the last 20 years the number of the Aders' duikers has fallen by around 80% from 5000 individuals to around 1000. Though the forest still remains primarily intact, it is at great risk from forest degradation and threats of development. Urgent action is needed to preserve it, while allowing it to be used in a sustainable way by the indigenous communities.