French oil supermajor Total SA (NYSE:TOT) has acquired oil and gas installations in east Africa for an undisclosed amount, covering assets in Kenya, Uganda and Tanzania.
The major acquisitions reportedly are in line with Total’s diversification policy, which focuses on building up logistics at a time when cost-profit equations have rendered extraction less attractive.
The deal to acquire assets belonging to Gulf Africa Petroleum (GAPCO) includes two logistical terminals, one in Mombasa, Kenya, and the other in Dar es Salaam, Tanzania. The deal also gives total a network of 100 gas stations in the region.
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The deal still has to be approved by the authorities of Kenya, Tanzania and Uganda.
“This acquisition is in line with Total’s growth strategy for the distribution of petroleum products and services in Africa, which aims at expanding in fast-growing regions while maintaining high profitability,” Momar Nguer, president of Total Marketing & Services, was quoted as saying.
A company spokesperson also noted: “The acquisition of these assets, which are complementary to Total’s existing operations in Kenya, Uganda and Tanzania, will strengthen Total’s logistics in the region and significantly accelerate the growth of our service station network, particularly in Tanzania, while leveraging the Total brand.”
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Gapco is a holding company incorporated in Mauritius with operating subsidiaries in Kenya, Uganda and Tanzania. Reliance Industries Ltd (RIL) has sold its 76% stake in GAPCO to Total. According to Reliance, GAPCO now operates 108 retail outlets and owns 260,000 kilo liters of storage capacity.
Total SA’s stock dropped 0.79% or $0.39 on 31 May, reaching $48.9 per share. The company’s shares are down 3.475 since October last year.
By James Burgess for Oilprice.com
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