Should the bid succeed, it will consolidate the influence of the world’s fourth richest man in the local fuel market since Mr Ambani already does business in the country through Gulf Africa Petroleum Corp (Gapco). The acquisitions are bound to have far-reaching regional ramifications since Gapco also does business in Kenya and Uganda.
About 6 firms, including Libya’s National Oil Corporation, have also expressed interest in buying the BP assets in the five countries. Kenya’s Kenol Kobil had also said it was keen to acquire the assets after BP announced early this year that it was quitting some of its African operations to concentrate only on a handful of markets.
Yesterday, Energy and Minerals minister William Ngeleja said though the government had expressed interest in acquiring the business, BP Africa had not responded. He said that as a key shareholder, the government would have to be consulted before the BP assets in Tanzania are sold.
“We are still waiting for their offer. Despite having said they want to sell their shares, they have not yet communicated with us officially,” Mr Ngeleja told The Citizen by phone from his Sengerema constituency, in Mwanza Region.
Last March, Mr Ngeleja announced that buying the BP Africa stake in BP Tanzania would be one of the government’s business ventures. He also said that even if BP found another strategic investor, the transaction would not go on without the government’s approval. “No new investor will come aboard without our approval. This is according to the partnership deal that we have sealed,” he said.
Although the BP Africa asset sale was announced before the company’s oil leak disaster in the Gulf of Mexico that has cost it billions of dollars, there were no reports of the proceeds being used to help pay damages arising from the debacle in the United States.
The assets BP is selling include retail outlets, terminals and aviation fuel stations. According to industry sources, Reliance may be looking at supplying gas oil, gasoline and jet fuel to the East African markets from its twin refineries at Jamnagar in Gujarat. Currently, the company is the supplier of oil to Gapco, which also owns retail outlets in Uganda and Kenya.
Sectoral experts say the acquisition of the BP assets would give a company a ready market for auto and aviation fuel with a scope for further expansion into neighbouring high growth countries. Besides selling fuel, lubricants and liquefied petroleum gas (LPG), BP is the largest aviation fuel supplier in Tanzania, with about 70 per cent market share. BP Tanzania has for a long time held a 35 per cent market share in both the retail and service stations.