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timesnews.co.ke: Monopoly fears as Shell acquires BP

By Kariuki Ndung’u

Shell Petroleum Company, a subsidiary of Royal Dutch Shell, has officially taken over the 50 per cent stake of the British Petroleum (BP) shareholding at the Shell/BP venture in the country.

The move follows plans by BP to exit from the local market citing reducing profits margins in the local oil industry due to heavy competitions and strict government policies on the oil industry.

The takeover means Shell will acquire the 50 per cent stake currently being held by BP Africa Limited in Kenya Shell Limited, BP Kenya Limited and Shell/BP (Malindi) Kenya Limited (the JV companies) making them wholly owned subsidiary of the Shell Petroleum company Limited.

Speaking yesterday, country chairman and managing director of the JV companies Patrick Obath said the takeover follows approval granted by the government through the finance ministry on condition that they sell off 30 per cent stake in the venture to local dealers.

The approval from the government came in on April 3 this year after finance minister refused to give nod to the takeover last year citing flaunting of the monopoly Act.

The minister however agreed of the takeover bid though with conditions one of them being to sell of 30 per cent retail sites to local dealers, 10 per cent of which will be in Nairobi.

Commenting on the takeover, Obath said the approval marks the beginning of a new and exciting chapter for Shell in Kenya as they will be in a position to consolidate all of their undertakings in the country in one fold.

However, Obath noted that from an operational point of view the acquisition will have little impact for staff and customers as the JV companies have always operated as one entity at the local market.

“The most noticeable aspect of the acquisition will be the gradual re-branding of all the BP branded assets particularly the petrol stations as well as the BP lubricants,” Obath said.

Obath added that, “our priority now is to work with the government, staff, JV partners, customers and other stakeholder to ensure a smooth transition.”

He said the acquisition of BP’s shares in the JV companies is in line with Shell’s commitment to improve and grow its oil products business in the country.

Obath revealed that they have cited National Oil as the firm where they will first request to buy out the 10 per cent stake.

The two oil companies have been operating Kenyan business under a management partnership where Shell has provided the managing director for the joint venture over the last 30 years.

BP currently runs 63 outlets in the country which will re-branded from BP’s green and yellow colour to Shell’s red and yellow.

At the same time, Obath welcomed the enactment of the Energy Bill saying that the move will lock out cowboy traders from the industry who on most cases puts Kenyans lives at risk.

He said the Bill will create a level playing field for all traders as it will streamline the sector.

Government through the Energy ministry early this year published the eagerly awaited Energy Bill.

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