MPs fault Nock’s revival plan over Sh8bn debt
A signpost at a petrol station branded by the National Oil Corporation.
What you need to know:
- Nock is seeking to tap an oil multinational as a strategic partner to inject at least Sh5.3 billion as part of its revival plans.
- Industry experts have also questioned how the government intends to handle the loans and other debts that Nock owes suppliers.
A parliamentary committee has poked holes into a revival plan for the National Oil Corporation of Kenya (Nock) involving payment of Sh8.3 billion worth of bank loans, amid growing uncertainty over the deal.
The National Assembly’s Energy committee faulted the Ministry of Energy and Petroleum and National Treasury for lack of clarity on whether they will settle the loans that Nock owes KCB and Stanbic Bank or if the liabilities will be transferred to a strategic partner.
Nock is seeking to tap an oil multinational as a strategic partner to inject at least Sh5.3 billion as part of its revival plans.
The firm owes KCB and Stanbic some Sh6.1 billion and Sh2.21 billion, respectively, which the loss-making entity has been unable to pay, leading to accumulation of penalties and interest.
The committee gave the Energy ministry and Treasury up to the end of this month to come clean on the loan repayment.
“Though feasible, the plan does not address existing unpaid bank loans which amount to Sh8.3 billion,” the committee says in a report tabled before the House. “There is a need for the Ministry of Energy and Petroleum in conjunction with the CS National Treasury to explore possible ways for the incoming non-strategic partner by January 31, 2024 to address the bank loan balance in order to enable the corporation to explore its mandate.”
Industry experts have also questioned how the government intends to handle the loans and other debts that Nock owes suppliers.
The two bank loans have nearly doubled over the years—from Sh3.5 billion for that of KCB and Sh1.3 billion for the Stanbic facility—on accumulation of penalties and interest.
The Cabinet had at first given Nock up to the end of September last year to onboard an oil firm to be its strategic partner, but the deadline was later pushed to end of October due to delays by Treasury to give the firm a go-ahead for the deal.
The government has since gone mum on the process even after Nock sounded out the three top oil multinationals in Kenya—Vivo Energy, TotalEnergies Marketing Kenya and Rubis Energy Kenya—to gauge their keenness on a possible deal.
Officials who spoke on condition of anonymity said that Nock was nearing a deal with one of the multinationals by November last year.
