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{
    "id": 189221,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/189221/?format=api",
    "text_counter": 184,
    "type": "speech",
    "speaker_name": "Mr. Murungi",
    "speaker_title": "The Minister for Energy",
    "speaker": {
        "id": 93,
        "legal_name": "Kiraitu Murungi",
        "slug": "kiraitu-murungi"
    },
    "content": " Sorry, the issues raised by the former Minister for Energy who was also the former Minister for Finance are valid. The reason the refinery had to be sold was because of a disagreement between the Government and other shareholders. The Government was of the view that it should make the refinery more competitive and therefore, there should be an upgrade project. The other shareholders did not want the refinery to be modernised and upgraded. They wanted us to close the refinery and continue importing all the products directly. Mr. Deputy Speaker, Sir, in view of the development taking place within the region with oil being discovered in Sudan and Uganda, and ourselves exploring oil and gas, we thought that this was a right decision. We thought there is a future for the refinery. That is why the various 1854 PARLIAMENTARY DEBATES July 16, 2008 studies were undertaken to see whether there was anything which would be done by the refiners to make it competitive. Indeed, as I stated in my Statement, the studies confirmed that the refinery could be upgraded and made commercially viable. Mr. Deputy Speaker, Sir, it is at that point that the shareholders who own 50 per cent of the shares decided to pull out because they did not want to participate in the refinery upgrade project. The Government said it would be willing to take on new shareholders who share the same vision with us regarding the upgrade project. Mr. Deputy Speaker, Sir, so, it is true that there was a disagreement which led to the proposal that the 50 per cent held by the private shareholder in the refinery be sold. Mr. Deputy Speaker, Sir, Wood Mackenzie did not undertake a study to recommend the upgrade of the refinery. Wood Mackenzie were merely transaction advisers. Their role was to identify potential shareholders who would buy the 50 per cent which was held by Shell BP and Chevron and this is what we proceeded to do. Mr. Deputy Speaker, Sir, I do agree with Mr. Okemo that the private shareholders have the right to sell their shares to any person they choose. They could sell to Libyans if they wanted to do so. They could also sell to the Indians if they wanted to do so or any of the companies which I mentioned. The question put by Mr. Okemo was: Then where does the Government come in, in this transaction which should solely be conducted between private shareholders under private purchase? It is true because the only area where the Government could come in this process is because the Government is also a shareholder in the refinery. In fact, Article 22 of the Articles of Association in Refineries says that if a shareholder wants to sell his shares to a third party, then he should offer the shares to the existing shareholder and that other shareholder is the Government. You cannot sell to a third party unless that shareholder, the Government waives its right to pre- empt. So, the matter came to Treasury so that it could waive its right of pre-emption and the matter is there in the Treasury as we are talking. No waiver has been drafted and I said Treasury is negotiating with Essar and Tamoil to see whether those terms could be improved before it can exercise its right to waive the pre-emption. The discussion is still there and I think the matter is not in my docket. I am saying the matter is not---"
}