National Oil Turns to Rubis Kenya for Financial Boost in New Deal

Government-owned National Oil Corporation of Kenya Ltd (NOC) has entered into a strategic partnership deal with Rubis Energy Kenya.

In a press statement dated Tuesday, March 18, NOC announced Rubis Energy Kenya as its non-equity strategic partner in a move aimed at enhancing Kenya’s oil and gas sector.

“This collaboration follows the successful completion of the Specially Permitted Procurement Procedure (SPPP) for a non-equity strategic partner, in compliance with the Public Procurement and Asset Disposal Act, 2015 (PPADA),” read the statement in part.

“The partnership is a key component of NOC’s broader turnaround strategy, which aims to scale up its downstream operations and strengthen its position in the petroleum products trading and marketing space.”

Details of Partnership Deal Between National Oil and Rubis

As a non-equity strategic partner, Rubis Energy will provide financial support, working capital financing, market development initiatives, and capital expenditure (CAPEX) financing for rebranding, rehabilitation, and expansion of NOC’s retail network.

The partnership also encompasses training, capacity building, skills transfer for NOC staff, the deployment of a new Enterprise Resource Planning (ERP) system to improve business processes and customer experience, and collaboration in the fuel card business to enhance customer engagement and service delivery.

“NOC’s turnaround plan is designed to ensure security of petroleum supply, stabilize fuel prices, and reduce the cost of living and doing business in Kenya,” the statement read further.

The partnership will also aid in clearing legacy debts and improving financial sustainability.

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The partnership comes as NOC faces severe financial challenges, with debts amounting to Ksh 8.3 billion and a negative balance sheet.

Meanwhile, the restructuring plan involves splitting NOC into three subsidiaries under a single holding company.

The government will retain control of strategic assets through two subsidiaries, while the downstream market entity, which includes fuel stations, will be managed by Rubis Energy.

During the signing of the agreement, Energy and Petroleum CS Opiyo Wandayi expressed enthusiasm about the partnership, stating that it will strengthen the Corporation.

“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,” he said.

“With this renewed profitability, the Corporation will be well-positioned to generate returns and, in the future, begin paying dividends to its shareholders.”

NOC and Rubis Emphasize Importance of Partnership

The CEO of NOC, Leparan Ole Morintat, highlighted the industry’s challenges, noting that the sector is highly complex and capital-intensive, requiring substantial investment and operational flexibility to remain competitive.

He noted that given the significant demand for government resources, securing a 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,” Leparan said.

“This process, initiated in 2019, has now culminated in the selection of Rubis Energy Kenya as our non-equity strategic partner.”

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On his part, Rubis Energy East Africa CEO and Managing Director of Rubis Kenya, Olivier Sabrié, emphasized the importance of strategic partnerships, stating that 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,” Olivier said.

“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.”

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