2.250
%
Neutral
93
mm boe
0
%
Kenya has benefited from a benign fiscal regime, although this has been undermined by geopolitical headwinds and fiscal stress. Gulf Energy's acquisition of the South Lokichar project in 2025 offers a renewed route to development, and the 2027 election is a watch point. Outlook maintained because the regime remains benign, but development is unproven. Outlook: Neutral. Risk premia unchanged at 2.25%.
October 7, 2026
Africa - East
mm bbl
bcf
Eastern Africa, bordering the Indian Ocean, between Somalia and Tanzania.
PSC/PSA
Relatively straight-forward Production Sharing Contract ("PSC") fiscal regime, with no royalty and with the contractors income tax liability being paid by the government. Cost recovery is negotiable, and production sharing is based on a sliding scale mechanism with project profitability (R-Factors). The State, through Kenya National Oil Company (KNOC), is entitled to a 10% stake in the event of a commercial discovery with no development carry.
President William Ruto faces a restless electorate after deadly youth-led protests over taxes in 2024 and 2025, ahead of the August 2027 election. US and UK guidance describe Kenya as East Africa's commercial hub with a sophisticated financial sector, but cite corruption, tax unpredictability, delayed government payments and fiscal stress under the IMF programme. The EIA notes that Kenya has no oil production; the South Lokichar project, which passed from Tullow to Gulf Energy in 2025, is still being advanced. Geothermal power at Olkaria supplies a large share of electricity.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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