Oil marketer Hass Petroleum Group has sold a 40 per cent minority stake to Oman Trading International (OTI) as it seeks funds to boost its capital and strengthen regional operations.
The transaction, whose value remains undisclosed, is subject to regulatory approvals in Kenya and the United Arabs Emirates.
According to data from the Petroleum Institute of East Africa (January-September 2016), Hass is facing stiff competition in the Kenyan oil sector. The firms controls a paltry 1.9 per cent market share in the fuel sales, 2.7 per cent in liquefied petroleum gas (LPG) sector, and 0.5 per cent in the lubricant business.
"I am convinced that this partnership is a major step in ensuring Hass' continued competitiveness across the region and I am confident that with OTI we can achieve our mutual long-term growth aspirations," said Abdinasir Ali Hassan, the chairman and founder of Hass Petroleum.
The company was incorporated in 1997 with operations in Kenya, Tanzania, Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo (DRC).
The company's major competitors include Total which controls 16.7 per cent of the petroleum sales market share, Vivo (16.6 per cent), KenolKobil (15.2 per cent), Gulf Energy (8.5 per cent), Libya Oil (5.6 per cent) and National Oil Corporation of Kenya (4.9 per cent).
Others include Hashi (3.7 per cent), One Petroleum (3 per cent), Bakri (2.6 per cent) and Gapco (2.2 per cent).
"We are delighted to move onto the next phase of growth for OTI, agreeing our first major investment into Africa with Hass," said Talal Hamid Al-Awfi, the firm's chief executive.
Oman Trading International was incorporated in 2006 as a joint venture between Oman Oil Company and Vitol Group, a global energy and commodity trading company.
OTI's key role is to trade oil, petroleum products and petrochemicals in the Middle East, Singapore, China and Europe.
Hass will invest the additional funding in opening up new outlets across the region and increase its competitiveness in the Open Tender System.
OTI will provide supply and trading expertise to enhance Hass service offerings.