The Cabinet has approved the proposal to split the National Oil Corporation of Kenya (NOCK) into three subsidiaries as the government moves to restructure the ailing parastatal.
Under the proposed turnaround strategy, NOCK will be split into NOC Upstream Limited, NOC Downstream Limited, and NOC Trading Limited.
National Oil is a state-controlled company that deals in both upstream and downstream oil business which the government now wants to change.
“Under the proposed turnaround strategy, NOCK will benefit from a partnership that restructures it into three subsidiaries segmented around the petroleum products value-chain,” a dispatch sent to the newsroom noted.
The oil distributor has been making losses, with numerous efforts to privatize the company failing.
"These subsidiaries include NOC Upstream Limited, focused on exploration and upstream production activities and services, NOC Downstream Limited, focused on marketing and distribution of petroleum products," Cabinet noted.
"There will also be a NOC Trading Limited, specialising in holding strategic stocks of petroleum products for import and export."
The oil marketer controls only 1.5 per cent of the market share, in an environment controlled by private and listed companies.
In 2017, a plan to list the company at the Nairobi Securities Exchange (NSE) to raise Ksh100 billion to buy back rights in the Turkana oil project failed.
Multiple attempts to sell a stake in the company or restructure the company has not materialised, with the company sinking deeper into losses.
The government has remained non-committal about the initial plans to list the company and subsequent plans to list at the London Stock Exchange.
The loss-making parastatal was incorporated in 1981 to secure the government's interest in the oil business.
