Brian Benza
11 March 2010
Growing oil company Engen plans to take over the assets of its rival, BP, in the countries from which BP is pulling out. BP announced last week that it will be pulling out of five southern African countries as a result of a strategic review.
In an interview with Bloomberg, a top Engen official said the company will take advantage of this opportunity and buy BP assets as part of its expansion strategy and penetration into new markets. "We're on a growth programme and they're selling assets," Wayne Hartmann, Engen's General Manager for international business, said in an interview in Cape Town yesterday. "We're very small in Tanzania and missing in Malawi." While some of its rivals are reducing activities in Africa, Engen has a "positive outlook" on the continent and rolled out a record 30 sites last year, Hartmann said. While the company has a "healthy balance sheet," a stock exchange listing to fund acquisitions has not been ruled out, he said.
Engen, which has 40 filling stations across Botswana, is already listed on the Botswana Stock Exchange's foreign board and is the third largest oil company in Botswana after BP and Shell.
In a statement last week, BP Africa CEO, Sipho Maseko, said he was confident the businesses they are looking to sell will offer good value and great potential to a purchaser, particularly given the strong economic outlook of the region as whole. "A new owner can build on our good assets and grow the business further," he said. "All of our operations are leading marketing businesses with strong market shares, well-run operations, experienced and capable employees and strong health and safety performance."
Efforts to get a comment from Engen Botswana were not successful. BP, which has been in Africa for over 80 years, has been operating in Botswana as an independent company since 1975 when it split from Shell.
BP Botswana has over 40 retail sites across the country where it has been competing with Shell, Engen, Caltex and Total. If Engen takes over BP in Botswana, it stands to enjoy the latter's wide range of customers and contracts, among them Debswana, BCL, BDF, the government's Central Transport Organisation, as well as big construction firms and transport companies.
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