Kenol buys Ethiopian oil company at Sh4b
By Kimathi Njoka and agencies
After consolidating its presence in East, Central and Southern Africa, oil marketer, Kenol/Kobil has spread its wings to Ethiopia.
The firm on Tuesday confirmed that it had acquired half of Shell Ethiopia operations, giving it the widest network in the region.
The acquisition, estimated to be in upwards of Sh4 billion, includes two terminals and a retail network of 81 service stations spread across the country. But officials declined to confirm the cost of the investment.
The Group, through its Ethiopian subsidiary, Kobil Ethiopia, has now bought half of the Shell Ethiopia operations-effectively giving it the widest network in the region as the firm seeks to widen its market share.
Shell Ethiopia now becomes the group’s first major acquisition towards the North African region. The acquisition comes two years after the company opened a subsidiary in the country.
The news about the acquisition saw the Kenol Stock price at the Nairobi Stock Exchange (NSE) surge by Sh5.50 on Tuesday to trade at Sh105 from Sh99.50 the previous day.
A total of 23,800 shares were traded up from 18,061 shares traded on Monday. Shell Ethiopia is a member of Shell International Group.
Prior to the acquisition, Kobil Ethiopia had acquired one service station in Semera, along the Addis Ababa – Djibouti route. The new acquisition includes a Head office in Addis Ababa consisting of a two-storey building, other office buildings, warehouses and a major restaurant situated on the main Debrezeit Road.
Through the acquisition, Kobil Ethiopia hopes to consolidate its fuels business in the country, as well as the sale of the Kobil Lubricants and LPG brands. The company plans to put up an LPG storage and filling facility to supplement its LPG business in the country.
The Group’s initial regional expansion focused on East Africa, and most notably in Uganda and Tanzania. The Group then moved towards the Central and Southern African regions in 2002, into Zambia and Rwanda.
In Zambia, it made a major acquisition after buying entire assets of Jovenna Zambia Limited from Ned Bank of South Africa. In Rwanda, the firm started with wholesale business in 2002 and one station until February last year when it made an acquisition of Shell Rwanda SARL.
Last month it acquired 20 service stations from KLSS Rwanda.
"The new assets in Ethiopia are a rich investment in a country that has great potential and growth opportunities", the group chairman and managing director," said Mr Jacob I. Segman, in a statement.
Although, the Ethiopian petroleum market, currently heavily regulated and with relatively low margins per unit, the group is optimistic of realising good returns.
"The acquisition should open attractive opportunities in oil trading into the country, LPG importation and distribution, Bitumen and Non Fuel business.
Meanwhile, British oil exploration company White Nile, hopes to start drilling in south Sudan by April 1, a company official said, adds Reuters.
French energy giant Total SA disputes White Nile’s contract with the south Sudan government, which gives the British company part of an oil exploration block previously allocated to Total. White Nile is 50 per cent owned by south Sudan’s state petroleum firm Nilepet.
The autonomous southern government was formed after a north-south peace deal in January 2005 ended a long civil war that was fought partly over oil.
"We’re planning on sinking our first well on April 1," Philip Ward, chief operations officer for White Nile told Reuters.
Ward said drilling equipment should arrive in the Kenyan port of Mombasa next week.
"We are in the process of discussing security arrangements with the authorities for the transport of the equipment (through south Sudan)," he added.
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Wednesday, February 7, 2007
Kenol buys Ethiopian oil company at Sh4b