A select group of high-flying individuals with deep and vast interests ranging from oil and gas among other conglomerates comprise an exclusive club of billionaires making a kill in the lucrative government-to-government oil deal introduced by the president William Ruto’s led Kenya Kwanza administration.
Investigations by The Informer Media Group have established that the Energy and Petroleum Regulatory Authority (EPRA) under the leadership of Director General Daniel Kiptoo has contracted an additional two oil and gas companies to the list of selected three.
Initially, three Arab firms that won the tender to supply Kenya with petrol, diesel and kerosene for nine months beginning April 2023 notably Abu Dhabi National Oil Company (ADNOC), Saudi Aramco, and the Emirates National Oil Company (ENOC).
In return, EPRA handpicked Gulf Energy Limited, Oryx Energies Kenya Limited, and Galana Oil Kenya Limited to in turn supply the fuel to other local oil marketers.
However, early last month, reports indicated that Saudi Aramco has dropped Oryx Energies Limited as its local importer of diesel in the government-backed fuel importation deal thus making the Kenyan oil marketing company (OMC) the first to be kicked out of the deal.
The Saudi Arabian oil major reportedly communicated its decision to replace Oryx Energies with Asharami and One Petroleum on December 20, 2023.
We have since established that EPRA has since recruited two additional local oil marketing firms; One Petroleum Limited and Asharami Synergy Limited into the lucrative oil programme.
This brings the overall participants of the programme to five.
Under the current arrangement, three Kenyan oil marketing companies (OMCs) own cargo upon delivery to Mombasa port by international Gulf-based oil giants Emirates National Oil, Abu Dhabi National Oil and Saudi Aramco.
The Kenyan OMCs are Galana Oil, Gulf Energy and Oryx Energy.
According to a recent International Monetary Fund (IMF) brief, by mid-November 2023, oil imports under the scheme amounted to about $3.7 billion (Sh592 billion). Letters of credit worth over $784 million (Sh125.4 billion) were also settled underlining the lucrative nature of the deal for players in it.
A deep dive into the reclusive figures minting the oil billions, we established that the newly recruited One Petroleum is a subsidiary of Mbaraki Bulk Terminal Ltd, a multi-petroleum products handling facility at the Port of Mombasa.
Mombasa based tycoon Mohammed Jaffer and owner of the Grain Bulk Handlers Limited partly controls it.
Investigations by The Informer Media Group established that Mojtaba Mohamed Jaffer, Ali Abbas Jaffer and Mohamed Husein Jaffer are the listed directors of One Petroleum Limited.
Others are Solomon Esebwe Mwanjuma Ondego, Ali Salaah Balala and Jonathan James Stokes.
Balala serves as its Executive Director while Nicholas Kokita is the company’s secretary.
It is owned by MJ Group, a Mombasa-based bulk cargo handling company, and its main branch is along Dedan Kimathi Road in the Mombasa Coastal City.
The Jaffers are also associated with Africa Gas and Oil Company, One Gas Ltd and Grain Bulk Handlers.
Africa Gas is partly controlled by the Mombasa billionaire businessman Mohammed Jaffer, who is also the owner of Grain Bulk Handlers. The company imports the bulk of the LPG consumed in Kenya and also controls a significant transit market to neighbouring countries.
The business mogul mid-2021 firmed up his grip on the lucrative cooking gas market after Proto Gas his flagship cooking gas brand got the State’s nod to snap up a rival cooking gas Solutions East Africa, whose LPG products trade as SeaGas.
In 2021, the Kenya Revenue Authority (KRA) went to court accusing their family oil and gas firms of Sh68 million tax evasion.
Asharami Energy is a subsidiary of Sahara Group, a Gulf-based oil multinational whose shareholders have interests in Emirates National Oil, Abu Dhabi National Oil and Saudi Aramco.
Official documents show Oryx Energies Ltd, was registered on March 27, 2003.
Herve Christophe Bouvet and August Dominick Mrema (both foreigners) are listed as directors while Kenyan Conrad Nyukuri is the company secretary.
The shareholders are listed as Overseas Petroleum Holdings SA, whose head offices are in Geneva, Switzerland and Johannesburg-headquartered Oryx Energies SA. Its listed office is Queensway House on Kaunda Street in Nairobi.
Galana Energies Ltd has as directors Shivam Raj Khanna (alternate director to Sheetal Rasenda Khan), George Ngige Kahira, Mary Waithera Kabiru and Jonathan Kahira Ngige, Isaac Mukui Nduru, Joseph Gitau Mburu, Sheetal Rasendra Khanna and John Morris Ohaga.
Its shareholders are London-headquartered Sai Iram Investments Company Ltd and Tapiola Ltd, a shareholder in oil marketer, Galana Oil Kenya Limited.
It operates out of Cotts House along Kaunda Street in Nairobi.
Asharami Synergy Ltd, which indicates its office as being housed at Vision Plaza, Mombasa Road in Nairobi, is owned by Sahara Group, which was founded in 1996 by Adebola Adesanya Ewaola, Tonye Cole and Tobe Shonubi, in Nigeria.
In its company, Ewaola is recorded as the director alongside their Kenyan subsidiary Asharami Energy (Kenya) Ltd.
A Kenyan Mark Samuel Muriithi is the company secretary.
The firm says it operates out of Vision Plaza along Mombasa Road in Nairobi.
In 2021, Debola Adesanya, the firm’s country manager, said the company would leverage its affiliation with its parent company to join forces with relevant stakeholders in the energy sector to enhance capacity building, access to clean energy and sustainable development in Kenya.
Sahara Group is a leading energy conglomerate with operations in over 40 countries across Africa, Asia, Europe and the Middle East.
Last December, the government said it had paid Sh240 billion to three Gulf oil companies for oil supplied to the country under the April 2023 government-to-government deal underlining how lucrative the programme is for local companies who receive the commodity.
Gulf Energy CEO Paul Limoh, for instance also, informed Parliament earlier his company paid $686 million to Emirates National Oil Company.
Galana Energies CEO Anthony Munyasya, on his part, revealed they had paid Aramco $76 million to Aramco, the other firm involved in the deal.
Oryx Energies Ltd, through CEO Angeline Maangi told Parliament they had paid $247 million to Aramco.
The OMCs who missed out on the Ruto deal have complained about EPRA favouring Galana, Gulf and Oryx, saying the previous Open Tendering System (OTS) brought about fairness that the current G-to-G plan has taken away.
Some local firms had earlier also protested against the deal, alleging its terms are opaque and shrouded in mystery.
This came as the International Monetary Fund (IMF) also recently called for a market-led solution in the energy sector even as it revealed that the National Treasury had signalled that the government intends to exit the Ruto oil import arrangement.
IMF cited the Treasury acknowledging the distortions the oil deal has created in the foreign exchange market and the accompanying increase in rollover risk of the private sector financing facilities supporting it.
In January last year, Energy and Petroleum Cabinet Secretary Davis Chirchir published new regulations for petroleum importation under legal notice number 3 of 2023; this effectively repealed the earlier regulations of 2012.
The new regulations created a new mode of procurement of oil for Kenya, under a government-to-government arrangement. Still, the regulations required that importation of petroleum products be through the open tendering system.
And to regularize that, regulation 4, sub-regulation 3, provides that “importation of petroleum products through a government-to-government arrangement shall be deemed to have occurred through the open tendering system.”
Before the new regulations, oil marketing companies would competitively bid for oil importation tenders every month; the winning bidder or bidders were required to procure on behalf of all other marketing companies in the country.
On March 1, 2023, the government-to-government deals were signed.
On March 3, invitations to tender for the supply of various petroleum products were closed.
Successful bidders were to be informed in two days, meaning March 5; details as to that process are not clear.
But on March 16, 2023 the ministry of Energy and Petroleum Development wrote to three local oil marketing companies informing them that they had been nominated by some three international oil companies in Saudi Arabia and the United Arab Emirates, to be their local trading counterparts.
