Explaining the decision, Kenyan Energy Ministry Permanent Secretary Patrick Nyoik said, "Because of international pressure, we have withdrawn that understanding."
The U.S. Embassy in the Kenyan capital Nairobi had warned the government it was essential that Kenya void energy deals with Iran to lessen revenue flows to the Iranian government amid concerns about the country's civilian nuclear program.
A number of countries, led by the United States and Israel, maintain Iran's civilian nuclear energy program is a cover for a covert project to develop a nuclear weapons program, a charge Iran has strongly and persistently denied.
Outgoing U.S. Ambassador to Kenya Scott Gration warned the Kenyan government, "There are sanctions that are in place for people that are buying oil and products from Iran -- there would be repercussions," the AfricaNews news agency reported Thursday.