Deal Brings Oman's Lubes to Kenya
Oman Trading International, a subsidiary of Oman Oil Marketing Co., inked an agreement with Kenya’s Hass Petroleum to sell the Muscat-based marketer’s range of lubricants in the East African country and eventually other markets in Africa.
The deal follows Oman Trading’s acquisition of a 40 percent stake in the Nairobi firm in June last year and will see Hass expand Oman Trading’s lubricant footprint across Eastern, Central and the Horn of Africa. Hass already markets its own brand of automotive, industrial and specialty lubricants as well as a range of greases. As East Africa’s biggest economy, Kenya provides a springboard to the rest of the region, analysts say. Hass Petroleum Group CEO Issa Mohamed recently estimated the Kenyan lubricant market’s value at around U.S. $180 million.
Oman Oil is the sole distributor of the Castrol and BP brand of lubricants in the Sultanate of Oman, although the agreement with Hass covers two Oman Oil brands – Optimo and Maximo. Hass will market Optimo Diamond, an SAE 20W-50 complying with API SL/CF specifications and recommended for gasoline and diesel engines in both passenger and light-duty commercial vehicles.
Hass will also sell Maximo Ultra SAE 15W-40 complying with API CI-4, ACEA E7 A3/B-4 and numerous original equipment manufacturer specifications for diesel engines.
“The target is to achieve a minimum market share of 1 percent of the Kenya lubricants market by 2020,” said Vijay Kumar, Oman Oil Marketing’s export manager for lubricants. ”This will be effected by focus on providing customers with an OEM-approved range of Oman Oil Marketing brand of lubricants supported by aggressive marketing campaigns and the local expertise of Hass. Oman Oil Marketing is a publicly listed company in which Oman Oil Co., wholly owned by the Omani government, holds a 49 percent stake. Hass Petroleum did not respond to a request for comment.
Finished lubricants have become increasingly integral to the downstream strategy of oil companies in the Middle East Gulf. Last year, Abu Dhabi’s Adnoc Distribution sold a 10 percent stake in an initial public offering that raised $851 million - the first time that a national oil company in the region has opened its business to international investors. Dubai-based Enoc’s drive into international markets has seen its business expand to 60 countries. Saudi Arabia and the U.A.E. have also recently made multibillion dollar investment pledges to the downstream sector.