French oil company Total has bought Chevron businesses in Kenya and Uganda.
Chevron, the American oil giant which trades in Kenya as Caltex, announced yesterday that its subsidiary Chevron Africa Holdings Ltd had agreed to sell 100 per cent of its shareholding in Chevron Kenya and Chevron Uganda to Total.
Chevron Kenya Ltd and Chevron Uganda Ltd’s assets include 165 Caltex-branded service stations, one terminal, seven fuel depots, six aviation facilities, one lubricants blending plant, and a commercial and industrial fuels business.
Chevron president, Global Marketing Shariq Yosufzai said the sale was part of the Corporation’s strategy to increase efficiency and improve returns.
Firm’s exit
Chevron Corporation, one of the world’s leading integrated energy companies with subsidiaries that conduct business globally, has been planning to exit the Kenyan market since last year.
Total is a multinational created by two successive mergers between Total and Belgium’s PetroFina to create Totalfina. Then Totalfina merged with Elf Aquitaine to create TotalFinaElf.
It was, however, later renamed Total in 2003. A statement from Total said transactions between the two oil companies were still subject to regulatory approvals and the deal is expected to close in the first half of next year.
The statement did not disclose the cost of the acquisition. However, industry sources said Total’s winning bid was worth Sh16 billion, having valued the Kenyan assets at Sh12 billion and the Ugandan operations at Sh4 billion.
Bidding
The Government, which had wanted to acquire the Chevron assets to expand presence of National Oil Corporation of Kenya is said to have placed a bid of between Sh10 billion and Sh10.8 billion.
Total’s winning of the bid could see the French company gain control of 35 per cent of the local oil industry assets, way above the required 25 per cent limit.
Chevron’s exit is set to bring major re-alignments in the local market with an estimated 33 players.
Chevron, Shell and BP are the three oil marketers, holding more than 50 per cent share at the Kenya Petroleum Refineries Ltd. Caltex is the fourth largest oil operator to leave the local market after Agip, Mobil and BP.