RESOURCE NATIONALISM - KENYA

UNCLAS NAIROBI 004279 SIPDIS SENSITIVE SIPDIS DEPT FOR EEB/ESC/IEC/EPC - GRIFFIN DEPT ALSO FOR AF/E, AF/EPS E.O. 12958: N/A TAGS: ECON ENGR EPET EINV KE SUBJECT: RESOURCE NATIONALISM - KENYA REF: A. STATE 150999, B. Nairobi 2144 Sensitive-but-unclassified. Not for release outside USG channels. ¶1. (SBU) Summary: "Resource nationalism" is not an issue in Kenya, a country whose only commercially viable natural resources at the moment are its landscapes and abundant wildlife. End summary. ¶2. In response to ref A queries: -- Q: Report and describe examples of actions or policies that are motivated by resource nationalism. A: None. Kenya is believed to have onshore and offshore hydrocarbon deposits, but none have been discovered in commercially viable quantities to date (please see ref B). A Canadian company was recently given rights to mine titanium in coastal Kenya. In general, Kenya is encouraging foreign participation in the extractive industries. Foreign companies are free to bid on exploration blocks for oil and gas, for example. If they are the sole bidders, they can achieve exclusive rights to explore the block after entering into a production sharing contract with the government in the event of a viable discovery. There are no equity restrictions on companies that deal with natural resources in Kenya. -- Q: Does there appear to be an increasing number of such actions? A: No. -- Q: What group, company or set of individuals appears to be the major beneficiary of resource nationalist policies in actions? A: None. Note: Although Kenya has not had a major oil or gas discovery, it has already committed itself to participating in the Extractive Industries Transparency Initiative in the event of a major discovery. -- Q: Does Post have any recommendations about possible USG actions to address growing resource nationalism? A: Given the responses above, no USG actions are necessary in Kenya on this issue at this time and likely for the foreseeable future. Ranneberger