French oil multinational Rubis is set to become a strategic investor in the struggling National Oil Corporation of Kenya (NOC Kenya).

A government official told Business Daily that NOC Kenya and Rubis have already sealed a deal and were at the end of last week awaiting the approval of Attorney-General Justin Muturi.

“The deal between Rubis and NOC Kenya is already agreed and is now on the AG’s (Attorney-General’s) table for approval,” the official is quoted as saying.

In October, the state-owned company approached the top three oil marketing companies (OMCs) in Kenya, looking to fetch upwards of KES5bn ($33.3mn) for a non-equity stake as part of efforts to revive its fortunes.

Apart from Rubis, NOC Kenya sent requests for partnership (RSPs) to Vivo Energy — the local retailer of Shell-branded products, which also markets the AfriGas LPG brand – and TotalEnergies Marketing Kenya.

Vivo Energy is the market leader in Kenya with a 22.07% share, followed by TotalEnergies Marketing (14.88%) and Rubis Energy Kenya Plc (10.88%), according to the Energy and Petroleum Regulatory Authority (EPRA).

NOC Kenya’s search for a strategic partner came after the government approved an elaborate restructuring scheme for the loss-making parastatal, which at the time had outstanding loans of KES8.3bn ($56mn) and a negative balance sheet.

At present, NOC Kenya is a fully integrated state corporation involved in all aspects of the petroleum supply chain as a single unit. In the restructuring, it will be split into three subsidiaries under one holding company:

• NOC Upstream Ltd, to handle exploration and upstream production activities and services; 
• NOC Trading Ltd, which will operate in the midstream specialising in holding strategic stocks of petroleum products for import and export;
• NOC Downstream Ltd, which will focus on marketing and distribution of petroleum products.

NOC Kenya operates a network of 110 service stations and commands less than 1% of the downstream retail market.

There are 136 registered OMCs in Kenya, each engaged in selling petroleum products, including AGO, kerosene, jet fuel, lubricants, and LPG,