Muna Wahome
19 May 2006
Nairobi — The impending exit of a major oil marketer from Kenya is now a reality. Another multinational yesterday said it was acquiring its Kenyan assets.
The plan by British Petroleum (BP) to quit the local market was first exclusively reported by the Nation last September.
Yesterday, Shell Petroleum Company, a subsidiary of Royal Dutch Shell Plc, said in a statement that it had signed an agreement "relating to the acquisition".
Joint venture
The firm will buy out BP's share in their oil products business - a venture the two firm's have been running under the same management in Kenya on a 50/50 basis.
The buyout is, however, subject to approval by the Government. BP's exit from the price-sensitive Kenyan oil market means that Tanzania is the only East African Community member state in which the firm will retain a presence. It withdrew from Uganda several years back.
Assets of the jointly managed venture by BP and Shell consists of retail stations and 17 per cent of the oil major's shares in the Kenya Petroleum Refineries (KPRL). Shell on its own holds a similar stake. "The specific commercial details of this transaction are confidential," said the statement.
Shell is understood to be among a number local players interested in buying out BP. The firms which showed an early interest included Kenol/Kobil and the National Oil Corporation. There were also local players in the bidding.
The joint venture trade names include Kenya Shell, BP Kenya and Shell & BP (Malindi) Kenya.
They are engaged in the marketing, sale and distribution of retail, commercial and aviation fuels and lubricants, gas and bitumen. They are supported by two main distribution terminals and a network of some 130 retail service stations.
Clinching the deal removes a major headache for the two marketers, which would have come with separation of the management.
Mr Iain Everingham, President of Shell Oil Products Africa, said: "This is an exciting opportunity for Shell in Africa and one that will help secure our future in Kenya ... This announcement is consistent with Shell's strategy of improving and growing our business in those markets where we choose to operate."
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