|
The Dutch conglomerate group of energy and
petrochemical companies, Shell Petroleum Limited,
has transferred all its shares in Shell Ethiopia
Limited – downstream oil products marketing company
in Ethiopia – to OiLibya, a subsidiary company of
the Libyan Oil Holding Limited.
The sale is part of Shell’s global strategy – “More
Upstream and Profitable Downstream” – a plan the
multi-national crafted to involve itself more in
searching for crude oil. The company needs to be
involved more in the upstream business, rather than
the retailing of oil products.
Shell Ethiopia, whose market share had once reached
over 50pc, currently commands less than 30pc,
according to a 2005 data obtained from Ministry of
Trade and Industry (MoTI). The reason for the
decline of the company’s market influence is its
hesitation to compete in bulk oil and oil product
supply tenders.
Shell launched operations in Ethiopia in 1929,
boosted its market share acquiring the properties
and business of Agip, and had 200 retail stations
all over Ethiopia as of 2000.
However, it sold some of its properties before it
eventually ended up with the current total transfer
of its share. It sold its Liquified Petroleum Gas
(LPG) business in 2004 to Ghion Industrial Group,
and a year ago it sold the depot it procured from
Agip – located around Gotera – as well as its 63
retail sites to the Kenyan franchise, Kobil Ethiopia
Limited.
On Thursday, July 10, 2008, Shell signed a sale and
purchase agreement to transfer its entire share in
Ethiopia and Djibouti to OiLibya, according to Bahru
Temesgen, External Affairs manager of Shell
Ethiopia.
OiLibya is found in 16 African countries. It is
active in retail marketing, wholesaling, aviation,
and lubricants marine fuels marketing.
The company had a conflict with its employees months
ago due to the sudden amendment of its retirement
policy, without the consent of the Labour Union. The
employees seriously opposed the amendment and linked
it to the closure of the company’s operation in
Ethiopia. However, the company’s deal with the
current buyer brought relief.
“The transfer includes all of the employees,” a
source from the company told Fortune on
condition of anonymity.
“Shell is pleased to have been able to secure a
buyer for the business as a going concern. It hopes
to complete the sale during 2008, and until then, it
is very much business as usual,” Xavier Le Mintier,
executive vice president of Shell Oil Products
Africa said, according to a press release sent to
Fortune.
The conglomerate also exits from eight other African
countries, deciding to remain only in Nigerians and
Benin.
The Ethiopian market, which until 2003 was
monopolized by Agip, Mobil and Total, seems to be
losing its long time retailers. Following Agip,
Mobil exited Ethiopia two years ago, and sold its
property to Total. Now, the giant Shell has followed
in their steps.
Currently, the local National Oil Company (NOC),
established in 2004, Yetebaberut Beherawi Petroleum
(YBP), established in 2005, and the very recent
entrant from Kenya, Kobil, are operating in the
country. Nile Petroleum is also poised to join the
market soon.
|
