Nairobi — The Government will inject over Sh1 billion into National Oil Corporation (Nock) this fiscal year to boost its capital base.

Energy minister Mr Kiraitu Murungi said the funds are already factored in the 2007/08 Budget and disbursement will start soon.

"It is the intention of the Government to empower Nock and to make it a major player in the downstream oil and gas sector," he said.

Plans, he added, are underway to make Nock the key distributor of petroleum products in Kenya and the Eastern and Central African regions.

Murungi was speaking during launch of National Oil Corporation, Service Charter at its Nairobi National Terminal on Tuesday.

He said Government is aware of the Corporation's pursuit for joint venture partnerships with international oil exploration companies and would allocate it some of the blocks to explore this year.

He said though Kenya has not found any commercial deposits of oil or gas, valuable data has been acquired in previous exploration activities. The data is currently being analysed and it is just a matter of time before the country strike oil or gas.

Accelerated effort to be a major player

Murungi said the country's hopes of striking commercial oil or gas remains high as demonstrated by the high number of companies currently involved in various exploration programmes.

"We also continue to receive applications from new companies seeking acreage for oil and gas exploration, which are being analysed and processed by the ministry," he said.

NOCK Acting managing director, Mr Mwendia Nyaga, said the parastatal had already submitted its application and expressed hope the Government will grant them an oil and gas exploration license soon.

As part of its accelerated effort to be a major player in the importation of crude oil in the region, Nock had reached a $65 million agreement under which it would get a trade finance facility from BNP Paribas - a leading French financial institution.

"With the backing of BNP Paridas, Nock is now ready to take part in the Open Tender System, thus become one of the oil industry's suppliers," he said.

Each year, Kenya, through the ministry of Energy, imports 20 crude oil cargos of 80,000 metric tonnes through the competitive monthly supply system.

"With this trade finance facility in place, Nock has now partnered with a subsidiary of the International Mitsubishi Corporation who will provide the supply back up," Nyaga said.

The partnerships will enable Nock strengthen its position in the market and participation in the open tender system with effect from this month.