National Oil acquires LPG facility and five Petrol Stations

National Oil Corporation of Kenya has concluded an asset purchase agreement with Total Kenya Ltd. The deal, which was concluded on Thursday 9th, September 2010, is the fruits of several months of negotiations between the two companies.

Consequently National Oil will acquire the following assets from Total Kenya Ltd with an LPG (Liquefied Petroleum Gas) filling plant located along Nanyuki Road in Nairobi key to its acquisition strategy. Retail petrol stations located along Waiyaki Way in Nairobi, along Ngong Road in Nairobi are the two stations acquired in Nairobi. Others include petrol stations located in Mtito Andei along the Nairobi Mombasa Highway, Thika town and Garissa town. The parties are working together to arrange the legal and administrative requirements to allow National Oil take over the above assets as soon as possible.

With the acquisition of the LPG filling plant, NOCK will no longer require the services of third party installations to refill gas cylinders and this is expected to cut costs with eventual better price management of the end products. The facility will also provide enhanced safe, efficient and affordable hospitality to other companies selling cooking gas, especially the smaller players.

All the retail petrol stations are located in areas where National Oil has not had a presence before. The two retail filling stations located in Nairobi and the one at Mtito Andei are located along busy highways. The presence of National Oil along the busy highways will be instrumental in fulfilling the role of stabilizing the pricing of petroleum products across the country. The retail station in Thika town is strategically placed in a high potential growth area while the one in Garissa is motivated by the company’s desire to have a footprint in the North Eastern region.

This acquisition is in line with NOCK’s Strategic Plan in which the corporation seeks to; grow its market share to a target of 15% by year 2030, increase its retail outlets by at least 20 per year to adequately distribute the allocated petroleum market quota of 30%. With this acquisition NOCK intends to fulfill the role of stabilizing the pricing of LPG and petroleum products making them more affordable to the end consumer. The national Oil Corporation is targeting to ensuring greater penetration of affordable LPG gas across the country

Spreading its presence in certain strategic areas where it has not previously been especially in areas that are poorly served by oil companies is one of its key targets as they continue to expand. With this acquisition, the total number of retail outlets owned by NOCK now stands at 70 countrywide with plans at advanced stage for it to acquire, lease and construct more retail outlets.