KenolKobil snaps up BP’s assets in five African states

KenolKobil plans to acquire assets of BP in five African countries, setting the stage for the oil firm to further grow its muscle in the highly competitive regional market.

Early this month BP announced that it had informed governments and employees in Namibia, Malawi, Tanzania, Zambia and Botswana of its intentions to exit its businesses in the countries following a strategic review of its refining and marketing businesses in southern Africa, which has shown that the company should focus on those countries which offer the greatest synergies with its supply portfolio. The oil firm singled out Mozambique and South Africa as those fitting in its new model.

“We have significant operations in Angola, Mozambique and South Africa and in Algeria, Egypt and Libya. We will continue to grow and invest in those markets,” BP Africa’s CEO Sipho Maseko said in a statement.

“We have discussed with the South African and Mozambique governments our desire to remain and invest in these two countries where we prefer to see our operations grow significantly.”

He said BP was confident that the businesses it intended to off load would offer good value and great potential, particularly given the strong economic outlook of the region.

“A new owner can build on our good assets and grow the business further,” he said.

Market share

On Monday, KenolKobil confirmed its interest in snapping up BP assets in the five countries, a development that could see its market share grow substantially.

“We do appreciate that in all these markets, BP’s operations are strong marketing businesses, with strong market shares and well-run and well developed operations and infrastructure which KenoKobil would very much be interested to acquire,” said Patrick Kondo, the oil firm’s group mergers and acquisition manager, in a statement.

The BP Africa region consists of the company’s downstream operations in Namibia, Botswana, Mozambique, South Africa, Tanzania, Malawi and Zambia which employ approximately 1,760 staff.

In addition the company is engaged in oil and gas exploration activities in Angola, Algeria, Egypt and Libya.

Downstream infrastructure in the region includes some 29 depots and terminals, more than 800 retail sites and the largest refinery in the region co-owned with Shell.

Mr Kondo said markets set to be exited by BP are located within areas that had been approved by the company’s management board as potential investment fronts.

Aggressive expansion

“Indeed KenolKobil would be very interested in all these markets and the opportunities they offer for the growth of our group in Africa in line with our move-south-strategy announced last year,” he said.

Recently, KenolKobil embarked on an aggressive expansion programme that has seen it gain command in several regional markets.

For instance, last year the company set up shop in Burundi in a 100 per cent take over of top oil marketer Oil Burundi SA, previously owned by Engen International Holdings — the largest brand in South Africa and which belongs to Malaysian multinational Petronas.

The deal could provide KenolKobil with a reliable fuel supply chain from Durban where Engen runs a refinery.

Kobil Burundi SA is the seventh member in the KenolKobil group of companies, a position that has seen the parent firm have a presence in all member countries of the East Africa Community.