African firms intend buying BP, Shell Zimbabwe assets

African firms intend buying BP, Shell Zimbabwe assets

Harare: African oil firms Engen Petroleum and KenolKobil said they plan to buy BP and Shell’s Zimbabwe assets in anticipation of growth under a unity government formed earlier this year.

The move would be the highest-profile exit by major foreign investors since President Robert Mugabe and Prime Minister Morgan Tsvangirai set up a power-sharing government in February.

Zimbabwe has asked the world for help for its devastated economy, and says it needs $10 billion to rebuild dilapidated infrastructure and ease a 90% unemployment rate.

Western donors want political and economic reforms before aid flows to the once-prosperous southern African country. Foreign investors are also likely to remain cautious.

Engen—one of South Africa’s leading petroleum products retailers—and Kenya’s oil retailer KenolKobil said they were to acquire all the shares in Shell Zimbabwe and BP Zimbabwe.

The companies plan to acquire more than 75 service stations in a deal now under consideration by Zimbabwean authorities.

European aid?

A Europe Union delegation will visit Zimbabwe on 12-13 September for meetings with government leaders, the first such talks in seven years, in a bid to restore aid and cooperation with the African state.

BP and Shell, whose joint Zimbabwe operations employ about 400 people and whose blending plant in Harare has a capacity of 30 million litres per year, were not available for comment.

Engen has existing operations in Zimbabwe and Jacob Segman, managing director of KenolKobil, said the joint venture would seek to benefit from the country’s reconstruction.

“While Zimbabwe’s economy has declined sharply over the last decade, it still boasts good infrastructure and we believe that this will form the basis of renewed economic growth," Segman said in the statement.