National Oil set for privatization through dual NSE, LSE listing


National Oil set for privatization through dual NSE, LSE listing

The government has initiated plans to sell a stake in state owned oil firm, National Oil Corporation.

This will see investors get a chance to acquire shares in the state corporation when the shares are made public through an initial public offer (IPO), with the government using the move to raise cash to fund activities in the nascent oil industry.

A notice from the Ministry of Energy and Petroleum indicates that National Oil will be dual listed on the Nairobi securities Exchange and the London Stock Exchange.

The government in May signed an MOU with the London Stock Exchange to allow energy companies to cross list and raise funds.

Speaking to Citizen Digital, Petroleum Principal Secretary Andrew Kamau said the government plans to maintain a majority stake in the oil company but will open it up to investors in a quest o raise capital.

“We needed to raise money for backing rights and listing gives National Oil fund raising options,” Mr Kamau said.

The IPO is expected to generate cash for National Oil which has recently taken an active role in the oil sector.

National Oil operator of a production sharing contract for block 14T and also conducts seismic tests to boost data for oil explorers.

Mr Kamau said with National Oil going public, it will be able to source funds from the international market at lower costs to fund its activities.

National Oil will join the likes of Kenya Power and KenGen which are majority government owned but listed on the NSE.

The two firms have actively raised capital through the bourse to fund capital intensive electricity generation and transmission projects.

The Ministry of Energy and Petroleum issued an expression interest to hire a transaction advisor to co-ordinate the IPO.

Mr Kamau did not indicate what stake of National Oil would be sold, only stating that the government would still want to maintain a majority stake.

The country is moving towards commercial oil production with heavy funding required for the pipeline, storage and handling facilities.

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Story By Mumbi Warui
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