Ruto approves National Oil takeover by a private investor
3 min read
Ruto through a cabinet resolution approves the proposal to split the National Oil endorsing its takeover by a private investor
Ruto through a cabinet resolution approves the proposal to split the National Oil endorsing its takeover by a private investor.
The Cabinet has approved the proposal to split the National Oil Corporation of Kenya (NOCK) into three subsidiaries as the government moves to restructure the ailing parastatal.
In an effort to save the National Oil Corporation of Kenya from bankruptcy, the government would give private investor control of more than 100 petrol stations operated by the corporation.
The government will then maintain control of the strategic assets through two subsidiaries while allowing a private investor to profitably manage the downstream market firm, which will be in charge of the fuel stations.
The profits from the entity will then be split with the deep-pocketed investor, who will be sourced from licensed oil marketers locally and abroad.
“Nock is Sh8.3 billion in debt and has a negative balance sheet. At the moment, it cannot even pay salaries and it cannot get new loans. Unless we go that route, then it will not survive,” Energy Cabinet Secretary Davis Chirchir said.
“Currently, it is impossible for National Oil to compete in the open tender system. The strategic non-equity investor will inject working capital and deal with branding to make the brand more visible in the market. Then profits will be shared at the end. National Oil has more than 100 fuel stations and at times you will find that more than 20 do not have the product. We are looking at this like a supermarket where one brings their product and it is sold at the stations.”
However, the investor will not own shares in the company.
As part of the plan, the Cabinet on Tuesday approved the conversion of National Oil into a group holding company with three distinct subsidiaries, including NOC Upstream Limited to handle exploration and upstream production activities and services.
Kenyans feel the pinch as banks hike the exchange rate to KSh 150 Per US Dollar
Raila hits out at Koome over dead bodies claim “which world do you live in?”
PCEA Thogot home care denies claims of mistreating elderly after BBC expose
IG Koome claims Azimio politicians hired dead bodies during demonstrations
NOC Trading Limited will operate in the midstream, specializing in holding strategic stocks of petroleum products for import and export while NOC Downstream Limited will focus on marketing and distribution of petroleum products.
At present, National Oil is a fully integrated State corporation involved in all aspects of the petroleum supply chain as a single unit.
The oil marketer controls only 1.5 percent of the market share, in an environment controlled by private and listed companies.
In 2017, a plan to list the company at the Nairobi Securities Exchange (NSE) to raise Ksh100 billion to buy back rights in the Turkana oil project failed.
Multiple attempts to sell a stake in the company or restructure the company has not materialized, with the company sinking deeper into losses.
The government has remained non-committal about the initial plans to list the company and subsequent plans to list at the London Stock Exchange.
The loss-making parastatal was incorporated in 1981 to secure the government’s interest in the oil business.
Also read,
Ruto condemned after signing Immunity Act against ICC
Mt Kenya leaders in a joint statement chide Ruto over his ‘publicity stunt’ development tour
Ruto moves to clamp down on ‘Brookside’ powder milk from Uganda with new directive
Revealed! Why US took bloodstained suit from Kenyan 1998 bomb blast
Follow us
