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Shell employees on go-slow over market exit report

Motorists queue at Shell station to get petrol. Photo/CHRIS OJOW

Posted Thursday, April 1 2010 at 00:00

Kenya Shell employees on Thursday started a two-day go slow, protesting against lack of formal communication on reports that the firm was leaving the Kenyan market.

The employees, who donned black and red outfits, prompted the firm’s executives to hold an emergency meeting to try and calm the nerves of the restless staff.

Players in the oil market reckon that OiLibya is the front runner to snap up the assets at an estimated price of $2 billion (about Sh152 billion) for Shell’s African operations.

Sources at the firm said the executives promised that a formal communication over the fate of Shell’s interests would be made today at 1 pm through a video conference addressed by regional Vice-President for North and East Africa George Brunton from Johannesburg.

The employees were concerned over their fate and compensation benefits in the event the firm bolts out.

“There has been a lot of anxiety surrounding reports about the planned sale. Today, employees wanted to know their future stay and there was a meeting to address them,” said a senior executive at the firm who requested not to be named.

Questions over whether Kenya Shell will continue to operate in the country deepened on March 16 after its parent company, Royal Dutch Shell, announced it would exit more than a third of its current fuel distribution and marketing operations.

Royal Dutch Shell, in its annual brief to investors, stated that it planed to exit from 35 per cent of its current downstream businesses, with 20 of 24 Africa retail outlets targeted.

However, the firm added that it would boost its presence in South Africa and Egypt, further putting doubts over its stay in Kenyan — which has in recent years witnessed the exit of multinationals Chevron, BP, Mobil, Esso and Agip because of low profit margins.

“Downstream continues to focus on profitability, with plans to exit 15 per cent of refining capacity and 35 per cent of retail markets, and growth investment to enhance the quality of manufacturing and marketing portfolios,” said chief executive Peter Voser in the report, adding that 5,000 employees would be leaving the company as part of restructuring.

In 2008, Shell left 15 African countries saying that it wished to concentrate on its remaining operations.

The firm sold its downstream business in Ethiopia, Sudan and Djibouti to OiLibya.

Officials at OiLibya Kenya declined to comment on the issue as managing director Kamel Jarnaz, who is authorised to speak for the firm, is currently out of the country.

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