ADVOKS GLOBAL · KENYA
Petroleum Act
26. Transfer of interest in petroleum agreement
Edition: 2026-07-24 · In force
26. Transfer of interest in petroleum agreement
(1)A contractor shall not transfer an interest in a petroleum agreement executed in accordance with this Act without the written permission of the Cabinet Secretary.(2)The Cabinet Secretary may permit a transfer by a contractor of an interest in a petroleum agreement where—(a)the contractor has applied to the Cabinet Secretary for such a transfer in the prescribed form;(b)the contractor has complied with this Act, the terms and conditions of the petroleum agreement and any other written law;(c)the person to whom the interest in the petroleum is being transferred has the financial and technical capacity to meet the contractor's obligations under the terms and conditions of this Act and the petroleum agreement; and(d)the taxes payable with respect to the transaction have been assessed.(3)The Cabinet Secretary shall not unreasonably withhold permission for the transfer of an interest in a petroleum agreement by the contractor to another person unless there is reason to believe that the transfer of that interest shall be against public interest or safety.(4)In this section—(a)"transfer of interest in petroleum agreement" includes the acquisition of control by the person to whom an interest in a petroleum agreement under this Act is transferred; and(b)"control" in relation to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management by that person, whether through the ownership of shares, voting, securities, partnership or other ownership or participation interests, agreements or otherwise.(5)This section applies to any direct or indirect transfer of interest or participation in the petroleum agreement, including the assignment of shareholding and other ownership shares that may provide control of a contractor possessing a participating interest in the petroleum agreement.(6)A contractor shall obtain the permission of the Cabinet Secretary before the contractor transfers or charges the contractor's fixed facilities.(7)The Cabinet Secretary and the contractor shall inform the National Government agency responsible for collection of taxes and revenues of all approvals for the transfer, assignment or trade of interest in a petroleum agreement within twenty days after the approval.(8)A holder of an interest in a petroleum agreement shall notify the Cabinet Secretary whenever there is any change in the ownership or control of a company or any joint venture company with an interest in the petroleum agreement, and the holder of the interest and the new owner shall give a written commitment to the Cabinet Secretary that they shall continue to honour the obligations prescribed in the petroleum agreement.(9)A company, other than a listed company, that has executed a petroleum agreement shall not transfer its shares or stocks to any person without the permission of the Cabinet Secretary.(10)Notwithstanding any other payments that may be applicable for the transfer of shares and stocks by a company that is a party to a petroleum agreement, the Cabinet Secretary may charge such fees for the transfer as may be prescribed in Regulations.(11)A person who contravenes the provisions of this section commits an offence and on conviction, shall be liable to a fine of not less than ten million shillings or to imprisonment for a term of two years or to both.