Kenya’s state-owned National Oil Corporation (NOCK) Thursday sealed a purchase deal with Anglo-Dutch firm, Shell Petroleum Company, for a 10 percent stake in the company’s oil distribution business, officials said.
“This deal came at the right place and the right time,” NOCK Managing Director, Mwendia Nyaga, told PANA after signing the purchase deals in Nairobi Thursday.
The sale was agreed upon following a mandatory approval by the Kenyan Monopolies Commission on Shell’s purchase of 50 percent shareholding in British Petroleum (BP) Africa in April this year.
The conditional sale agreement was meant to guard against a possible oil monopoly in Kenya. Nock will substantially increase its stakes in the local market.
NOCK is currently one of the smallest oil distributors. It was formed in the 1970s to check the dominance of foreign oil multinationals and has the role of importing crude oil on behalf of all the other oil distributors.
Shell Managing Director, Patrick Obath, said the sale of its downstream activities was based on the approval granted by the Kenyan government for its purchase of BP shares.
BP announced it was bailing out of Kenya because the downstream business, which involves distribution and supply of refined oil, was less profitable in the east African nation.
NOCK will now operate 13 retail fueling sites previously owned by Shell. The takeover, according to the officials, would be gradual.
“The government made the requirement that we had to sell some part of our business,” Obath said without disclosing the purchase amount.
“This is the kind of information that can give people a lot of competitive advantage over us in the market,” Obath told PANA.
Nyaga said the purchase was a milestone that marks the metamorphosis of the state-owned company. He said the deal would allow NOCK to extend its services across most parts of Kenya.