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allAfrica.com: Kenya: Oil Marketers Dump Stake in Refinery

The Nation (Nairobi)
17 January 2008
Nairobi

Three multinational oil firms are finally dumping shareholding in the local refinery, statements from Nairobi and New Delhi confirmed on Wednesday. An Indian firm, Essar Energy Overseas Limited, is to buy half the stake in the only refinery in the region.

The other half of the Kenya Petroleum Refineries Ltd (KPRL), which is in dire need of upgrading, is owned by the Kenya Government.
 
“Shell, BP and Chevron have signed a share purchase agreement to sell their shareholding in Kenya Petroleum Refineries Ltd to Essar Energy Overseas Ltd,” said Shell external affairs manager, Ngaari Mwaura in a brief statement on Wednesday. “The sale is subject to certain conditions precedent. The transaction is expected to close in 2008.” Shell last year took over BP downstream operations in Kenya as the British oil giant set off a process where it would disengage with the rapidly competitive local market.

“This is the first downstream acquisition overseas for any Indian company. We look forward to working with the government of Kenya to develop KPRL further to supply the growing Kenyan and adjacent markets and finalise the upgrade project,” Essar Energy CEO Naresh Nayyar was on Wednesday quoted by the Times of India as saying. Essar owns three exploration and production blocks in Madagascar and one in Nigeria.

The new shareholders are expected to inject massive capital in the facility for upgrading. The multinationals appeared reluctant to inject the requisite capital.

The investment by Essar may signal a further waning in importance of Western companies in the local economy.

http://allafrica.com/stories/200801170339.html

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