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.
Through a notice by the Ministry of Energy and Petroleum , the government says it plans to dual list on the Nairobi securities Exchange and the London Stock Exchange by early 2019. The government hopes to raise $1 billion (Kshs. 100 billion) in the IPO.
The listing on the London Stock Exchange in line with an MOU signed with the government that allows cross listing of energy companies. The notice by the government says the IPO aims at raising funds to grow the fledgling oil industry. National oil has taken an increasingly active role in the sector and currently, the state owned oil firm has a production sharing contract for block 14T located on the shores of Lake Bogoria all the way to Lake Magadi. It further conducts seismic tests to boost data for oil explorers.
A chunk of the funds raised will go towards back-in rights, which refers to an option granted to governments to acquire a share of blocks where oil had been struck after an initial sale to firms in the exploration phase according to Reuters. The government has not announced what percentage it wishes to acquire from the current joint venture partners Tullow Oil, Africa Oil and Maersk Oil and Gas.
