Kenyan workers and local businesses are set to gain more opportunities in the petroleum industry under new local content regulations set by the Ministry of Energy, which require companies to prioritize Kenyan citizens and locally owned businesses.
The Petroleum (Local Content) Regulations, 2026, set out requirements for contractors, licensees and permit holders operating across the upstream, midstream and downstream petroleum sectors.
The rules require petroleum companies to prioritize qualified and skilled Kenyans for employment at all levels of the industry. They also require preference for goods manufactured or assembled in Kenya and services and works provided by Kenyan entities.
The regulations further require 30 per cent of goods, works and services to be provided by youth, women and persons living with disabilities.
Ministry Sets 100% Kenyan Job Target in Petroleum Industry
The regulations introduce specific targets for the employment and training of Kenyans in the petroleum sector.
For upstream and midstream operations, EPRA said Kenyan participation in management positions is expected to rise from 30 per cent at the start of a petroleum agreement or licence to 75 per cent after five years and 100 per cent after 10 years.
For core technical positions, the target rises from 10 per cent at the start to 40 per cent after five years and 55 per cent after 10 years.
Other staff positions are expected to have 80 per cent Kenyan participation at the start, rising to 100 per cent within five years.
The requirements are even higher in the downstream sector, where management and core technical positions must have 90 per cent Kenyan participation from the start and reach 100 per cent after five years.
Foreign Workers Face New Requirements
Companies will also have to justify the hiring of foreign workers.
Before applying for a work permit for a foreign employee, a petroleum company must obtain a recommendation from the relevant authority.
The application must include evidence that qualified Kenyans are not available for the position, together with details of the foreigner’s qualifications, experience, responsibilities and proposed period of employment.
Companies must also prepare a plan showing how a Kenyan will eventually take over the position.
Under the succession requirement, a Kenyan employee must understudy a foreign worker for up to four years, after which a Kenyan is expected to take over the position.
Local Businesses to Get Priority
The regulations extend local participation beyond employment to procurement.
Petroleum companies must give preference to Kenyan businesses for services including engineering, consultancy, construction, transport, security, hospitality, waste management, clearing and forwarding, office supplies and financial services.
Companies requiring financial services must give preference to Kenyan financial institutions. They must also maintain a bank account in Kenya for petroleum-related financial transactions.
Legal services must similarly be sourced from Kenyan lawyers or law firms where the required capacity exists.
The 30 per cent requirement for goods, works and services supplied by youth, women and persons with disabilities creates a specific procurement opportunity for businesses owned or operated by the three groups.
The companies will be required to report their local content performance, including the value of contracts awarded to local entities and the number of Kenyans employed and trained.
Companies Must Publish Procurement Plans
Contractors, licensees, and permit holders will also be required to publish their procurement plans 60 days before the start of the next reporting year.
The rules require petroleum companies to submit local content plans covering areas such as employment, training, research, technology transfer and procurement.
For upstream operations, annual local content plans must be submitted to the authority three months before the beginning of the subsequent contract or licence year.
Training and Technology Transfer
The regulations place emphasis on preparing Kenyans to take up technical and specialised positions in the petroleum industry.
Companies must outline their training needs, available on-the-job training opportunities, project-specific training requirements and the expenditure expected to be incurred.
They must also report the number of Kenyans recruited and trained, the training undertaken and existing skills gaps.
Upstream and midstream companies must have technology transfer plans to transfer technology and expertise to Kenyan companies, learning institutions, and citizens.
They must also support research and development, industrial attachments and apprenticeship programmes in Kenya.
The rules also set minimum local content levels for different goods and services.
For example, civil works have a 100 per cent local content target from the start, while catering, cleaning and laundry, security, communication, fuel supply, human resource management and office supply services are also set at 100 per cent from the start.
Other areas have targets that increase progressively over five and 10 years.
The regulations also cover engineering, drilling, seismic services, logistics, waste management, environmental services, construction and transport.
Penalties for Non-Compliance
The regulations give the authority powers to monitor and inspect petroleum operations to determine whether companies comply with local content requirements.
Companies that fail to comply with directions, allow authorised inspections or submit required reports commit an offence and may face a fine of up to KSh1 million, imprisonment for up to six months, or both.
The authority can also investigate suspected fronting, bid rigging and cartelisation in petroleum procurement.
Companies operating under the regulations must comply within six months of their publication in the Kenya Gazette.
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