Effective External Stakeholders Engagement: A Case Study For Upstream Oil And Gas Sector In Kenya.

ABSTRACT

The oil and gas sector remains one of the highly monopolized industries in the world, due to not only the scarcity of these resources. This has led to numerous efforts for organizations the world over to look for ways of generating renewable energy to complement the ever-growing needs for energy. This paper sought to investigate the approaches used in engaging the external stakeholders in extractives industry for upstream oil and gas sector in Kenya. The overarching objective of the study was to examine the challenges and approaches used in engaging the external stakeholders in extractives industry for upstream oil and gas sector in Kenya. Due to the limited upstream oil and gas activities in Kenya, the study adapted an exploratory research design ttargeting a population of similar or analogous infrastructural projects of national importance that have been or are in the process of being implemented. It suffices it to say that upstream oil and gas development involves drilling of wells, construction of oil extraction facilities, crude oil storage among others. This is similar or analogous to other big infrastructure projects like construction of roads, railways or airports. The study recommends effective and all-inclusive stakeholder engagement, while paying very close attention to communities as key stakeholders and this should be done considering political, social, cultural, economic, technological context. Any effective stakeholder engagement process should be specific for specific communities and oil and gas companies must resist the temptation to replicate this process without these socio-political nuances. Communities’ should be educated on the importance of the investors and how to treat them, this will make the communities to better understand and appreciate investors seeking to invest in Kenya. However, the government must lead these community engagements to ensure that the expectations of members of communities are properly moderated and the role of the investor clearly understood. Looking at most Vision 2030 flagship projects, very few of them have been execute effectively, on time and budget. From Single Gauge Railway, Kinangop Wind Power Project, Lake Turkana Wind Power, proposed AMU coal-fired plant, among many others, have either stalled or are operation behind schedule. The study concluded that proper external stakeholder involvement led to increased efficiency and reduction of costs in their operations, achieved through greater cooperation and involvement of stakeholders in the realization of strategic objectives of the oil and gas companies.