French oil major Total Outre Mer is set to become the dominant player in East Africa’s oil industry with the acquisition of Gulf African Petroleum Corporation (Gapco), says a news report today on the StandardMedia website.

It means Total Kenya, Total Uganda and Total Tanzania, will now enjoy the full economies of scale in both downstream and upstream sectors, riding on the massive assets of Gapco.

Total acquired Elf Oil Kenya Ltd and Chevron Kenya Ltd (Caltex) in 2000 and 2009 respectively makihng it the largest oil and gas marketer in Kenya.

Standard Media says: The latest development comes when Total exploration and production unit in Uganda has also acquired a major stake in Tullow Oil to put its stake at 54.9 per cent. As a major shareholder, the firm is promising to steer Uganda into being an oil producer, with first exploration expected in three years’ time. This puts Total in prime position to benefit from the huge explorations.

Eric Musau, an analyst at Standard Investment Bank said that the deal would strengthen Total’s position in the region given that it also has interests in upstream business in Tanzania. Mr Musau said Uganda is set to benefit more by having Total handling both exploration and transport.

“The Government has to be careful to get the most affordable infrastructure and if it can get the pipeline and production from the same company, then it will ensure than when revenues start flowing in, it will get a good amount,” he said.

Gapco, 76 per cent-owned by Indian mogul Mukesh Ambani through India-based Reliance Industries Limited, has been in control of the oil import tenders in Kenya.

Lowest price Industry data from Petroleum Institute East Africa (PIEA) by close of September showed Gapco dominated imports followed by Total Kenya. Data to September showed that Gapco won 20.4 per cent of all the tenders called by the Ministry of Energy through open tendering system where oil marketers compete on basis such as who offers the lowest import price. Total came in second, winning 18 per cent of the import tenders. Therefore, in the absence of Gapco, Total is set to dominate the oil import business in Kenya.
. Gulf Africa Petroleum Corporation imports, supplies, and transports oil products in East Africa. The company owns and operates storage terminal facilities and a retail distribution network in Tanzania, Uganda, and Kenya, as well as storage terminals in Dar Es Salaam, Tanzania; Mombassa, Kenya; and Kampala, Uganda. It also operates outlets covering retail and industrial segments. The company was founded in 1980 and is based in Ebene, Mauritius.

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