MONDAY, NOVEMBER 21, 2005
IndianOil looks to acquire BP's petro assets in Kenya
TIMES NEWS NETWORK
Petro-market leader IOC, has put in a bid to acquire British Petroleum's stake in its petro-marketing ventures in Kenya. BP Africa is in partnership with Shell in three petro-marketing companies and also has a stake in a coastal refinery in Mombasa.
BP is planning to exit the Kenya market and has put itsstake on the block. Several companies including, partner, Shell is in therace to acquire BP's stake too.
IOC's move comes close on the heels of its failed attemptt o acquire Tupras Refinery in Turkey. IOC, has drawn up an expansive strategy to move into new markets, particularly in the African continent.
Senior IOC officials have recently said that the companywas hoping to raise money by selling a part of its holding in ONGC to fundt heir acquisition of marketing and retail assets abroad.
British Petroleum, which holds a stake through its subsidiary BP Africa in the three petro-marketing companies, is set to offload its 50% shareholding held in a joint venture with the Dutch company Shell.
BP, which has shareholding in three local companies, BP Kenya, Kenya Shell and BP Malindi, will also be offloading its 17.1% shareholding in Kenya Petroleum refineries. The other stake holders in this company include Shell, Caltex and the Kenyan National Oil Company.
Hindustan Petroleum, which has recently tied up with BP for developing a refinery in Punjab and a JV retail market in India, was also learnt to be keen on these assets. BP's agreement with HPCL also provides for HPCL to farm in some of BP's assets globally.
However, senior officials at HPCL said that there was no decision as yet on this particular asset. Four companies have submitted bids for BP's stake including two locally incorporated companies.
Sources in investment banking circles confirmed that IOC has held parleys with BP and a tentative bid has been put in.
Unlike recent sellouts in the oil sector, BP has not called for open bids to sell its stake. IOC's negotiations is a hush-hush affair and no details were available on the deal size. IOC declined to comment on the development.
The Kenyan petro-retail market was partially controlled but had immense growth opportunities. For IOC, this market could provide a toehold to other markets in East Africa such as Zimbabwe and Tanzania among others.
The coastal refinery also would give IOC an opportunity to sell products to other neighbouring African markets, if it wins the deal.