National Oil eyes turnaround with new work model
A National Oil Corporation petrol station in Eldoret town. The corporation is targeting to penetrate more markets in rural and peri-urban areas. photo | JARED NYATAYA
What you need to know:
- Nock plans to open 185 retail stations in an ambitious plan to double its market share to 10 per cent in the next two- and-a- half years.
- Firm will next year list on the Nairobi and London bourses and targets to raise $1bn (Sh100 billion) through an IPO.
The National Oil Corporation of Kenya (Nock) plans to open 185 new retail stations across the country over the next three years as part of its turnaround strategy.
The State oil marketer also plans to pick a firm “in the next few months” to partner with in setting up onshore drilling, signalling an intention to step up the hunt for oil and gas in its blocks.
Nock chief executive MaryJane Mwangi told Sunday Nation that the ambitious plan to expand its retail footprint would double its market share to 10 per cent within the next two and half years.
“The first area of focus is growing our retail station footprint from the current 115 stations to 300 stations primarily through partnerships with Kenyans under a franchising model,” said Ms Mwangi, who was confirmed to the helm of Nock following the acrimonious exit of Ms Sumayya Hassan-Athmani in July 2016.
Nock, incorporated in 1981, is involved in the marketing of petroleum products (downstream), development of petroleum infrastructure (midstream) and exploration of oil and gas (upstream activities).
The firm began operations in 1984 and its strategic mandate is to play a price-stabilising role and arrest any cartel-like behaviour by private marketers.
Ms Mwangi said the agency is banking on the huge unserved demand across the country to grow its retail footprint and boost earnings.
“National Oil has been tasked with providing fuel to government entities. To achieve this objective a wide network is key and will assist the corporation to bring quality and affordable petroleum products closer to the people, particularly in areas that are currently underserved,” said Ms Mwangi.
She added that the State oil marketer is eyeing to scale up its specialties; liquefied petroleum gas (LPG) and lubricants.
“With LPG penetration currently standing at only 10 per cent, this presents an opportunity for growth for the corporation. Our SupaGas LPG brand has been growing at an average of 40 per cent year on year for the past two years.”
She said the agency is targeting to penetrate more markets in rural and peri-urban areas.
National Oil, which has lagged behind its competitors in the supply of lubricants — a factor it attributes to lack of its own blending plant, forcing it to rely on competitors for blending — has signed a partnership with an international firm to boost its fortunes.
Ms Mwangi said the agency will pick a firm “in the next few months” to partner with it to set up onshore drilling operations.
Nock operates its own exploration acreage on block 14T located within the Tertiary Rift basin and running from the shores of Lake Bogoria to Lake Magadi Basin on the border with Tanzania.
President Uhuru Kenyatta last week told UK investors at the London Stock Exchange (LSE) that Nock will next year list on the Nairobi and London bourses.
The dual-listing on LSE and NSE targets to raise $1 billion (Sh100.62 billion under prevailing rates) through sale of shares in an initial public offering.
Nock will use the proceeds to buy back up to 35 per cent stake in two oil blocks in Lokichar Basin in Turkana.
UK’s Tullow Oil and its two partners have struck recoverable oil reserves estimated in the upwards of 750 million barrels in blocks 13T and 10BB south of Turkana since they made the first discovery in February 2012.
The dual-listing will be facilitated by an earlier memorandum of understanding between LSE Group and NSE.
