The Kenyan government has partnered with RUBiS Energy Kenya to rescue the struggling National Oil Corporation (NOC), transferring the management of over 99 NOC fuel stations.
This partnership is a key component of a broader restructuring plan that aims to prevent the collapse of the state-owned entity, which currently faces debts of KSh8.3 billion and a negative balance sheet.
The restructuring plan, approved by the Cabinet, involves transforming NOC into a group holding company with three distinct subsidiaries:
- NOC Upstream Limited: focused on exploration and upstream production activities.
- NOC Trading Limited: Specializing in holding strategic stocks of petroleum products for import and export.
- NOC Downstream Limited: Concentrating on the marketing and distribution of petroleum products.
Under the partnership, RUBiS Energy Kenya will manage NOC Downstream Limited, which includes the fuel stations, with a profit-sharing agreement.
This arrangement aims to make the downstream operations profitable. Media reports indicate that RUBiS Energy will invest KES 3 billion in working capital and an additional KES 3 billion for the refurbishment of NOC’s fuel stations, in exchange for 30% of the profits from fuel sales.
The partnership was formalized following the Specially Permitted Procurement Procedure (SPPP) in compliance with the Public Procurement and Asset Disposal Act, 2015 (PPADA).
Opiyo Wandayi, Cabinet Secretary for Energy and Petroleum, said, this collaboration marks a transformative step in strengthening the National Oil Corporation of Kenya, enhancing its capacity, and creating long-term value for the citizens of this great republic. With this renewed profitability, the corporation will be well-positioned to generate returns and, in the future, begin paying dividends to its shareholders.
Leparan Ole Morintat, CEO & Managing Director of NOC disclosed that “Given the significant demand for government resources, securing shareholder capital injection was not feasible. As a result, NOC sought a non-equity strategic partner to provide the financial support and technical expertise needed to revitalize the company and restore profitability. This process, initiated in 2019, has now culminated in the selection of RUBiS Energy Kenya as our non-equity strategic partner.”
Olivier Sabrié, CEO of RUBiS Energie East Africa and Managing Director of RUBiS Energy Kenya, said, “In today’s dynamic market environment, collaborations are key to driving growth and success. By leveraging diverse expertise, resources, and networks, we can create a competitive edge and generate value for all stakeholders involved. RUBiS Energy Kenya is committed to supporting the corporation through working capital financing, management and branding support, and transferring critical capabilities and skills to the National Oil team.”
“By leveraging diverse expertise, resources, and networks, we can create a competitive edge and generate value for all stakeholders involved.”
