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Climbing a Slippery Slope

Climbing a Slippery Slope

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Published by Aamera Jiwaji
Without sacrificing her religious beliefs or her femininity, Sumayya Hasan-Athmani has risen to the top of Kenya’s cut-throat energy sector. We look back at her personal panache in the corporate world, as she primes herself for the next step
Without sacrificing her religious beliefs or her femininity, Sumayya Hasan-Athmani has risen to the top of Kenya’s cut-throat energy sector. We look back at her personal panache in the corporate world, as she primes herself for the next step

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Published by: Aamera Jiwaji on Mar 05, 2014
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|
 
Nairobi Business Monthly 
 
 June

Cover Story 
 Without sacrificing her religious beliefs or her femininity,
SUMAYYA HASSAN-ATHMANI
 has risen to the top of Kenya’s cut-throat energy sector. We look back at her personal panache in the corporate  world, as she primes herself for the next step
H
er 9th floor o
 ce, which is three sides wall and one side glass, offers a panoramic view of the city starting at Nairobi Serena, crossing Central Park and stretching into the busy streets of the Central Business District.When I watch the traf-fic from up here, she said, I can see how we are making the situation on the roads worse for ourselves.
 
She turned with a smile, a blue silhouette against the reflected grey of the glass.It was just one sentence in a conversation of many that morning, and would have been unremarkable if it had come from anyone except Sumayya Hassan-Athmani, Managing Director of National Oil. But as the head of the state corpo-ration in Kenya’s energy sector - a country on the brink of becoming an oil producer - her o
 
 the cu
 
 comment was telling.
 
It spoke of vision and perspective, and showed she was much more than a poster girl for the changing role of women in modern society.As we went to press, Ms Hassan-Athmani had been shortlisted for the position of Permanent Secretary, suggesting she may ascend the next rung in the ladder of achievement.
 
Changing tides
When Ms Hassan-Athmani took over the helm of National Oil in 2011 from former MD Mwendia Nyagah, the industry was surprised.But the controversial exit of her predeces-sor and that the position had been vacant for a seven month period during which time she was acting MD, did not raise as many eyebrows as the fact that she was the first woman to head a company in Kenya’s competitive and at times ruthless energy sector.However having risen through the ranks, her knowledge of the internal workings of the company - from the legal and the corporate a
 
airs side - seemed to be a boon.“From where I was sitting, I had a wide view of the whole company,” she said. Her portfolio had allowed her to interact with employees, the Board, directors and stakeholders in managing
Climbing a slippery slope
By Aamera Jiwaji
the brand, and this cross section of exposure was consolidated when she was appointed Deputy MD.She looks back to her legal training as a cornerstone of her achievements. While some decades ago, companies were isolated in their approach to business and preferred to operate as stand alone entities, today the industry is defined by partnerships, she said. Her legal background has been particularly useful since today’s “global environment is about managing these partnerships and relationships”.Ms Hassan-Athmani considers herself to be one individual in the wave of change that has a
 
ected the way global business is practiced today.“Many years ago, an oil exploration company was headed strictly by technical people like geol-ogists because at that time it was about drilling and finding the oil. It was the science,” she said.The second stage was where oil companies were being headed by finance people “because [drilling] results have been found and now it is about numbers and accounting.”The prediction was that the third phase of
 
June

 
 
Nairobi Business Monthly 
 
|
 

ENERGY
The 39 year-old CEO of National Oil has a strong background in law, which has helped her manage partnerships in today’s changing global arena.
 

 
|
 
Nairobi Business Monthly 
 
 June

Cover Story 
CEOs of energy companies would be lawyers because “it is now about partnerships and joint ventures,” she said.These three phases were outlined by a senior manager at a global oil and gas company. As she narrated how in anticipation of this change of guard, his company was deliberately grooming a lawyer as the number two for the MD posi-tion, she said that what was running through her mind was how at the time she was Deputy Managing Director and her MD was a finance person.“On our side it was a coincidence; on their side it was a deliberate strategy, but I found that what he was saying is exactly what has happened. Right now it is all about joint ventures and partnerships and strategic alliances,” she said.The implications of this evolution in business leadership style can be seen across sectors, she continued, and “today a telecommunications company is partnering with a bank; a housing company is partnering with an ICT company because competitive advantage requires you to keep innovating and to keep looking at who you are partnering with, and how can you deliver better value.This, she believes, is the crux that defines a company’s future competitiveness.
Holding hands with locals
“Oil is oil,” Ms Hassan-Athmani said, touching on how the product she deals with is homoge-neous and has a standard quality across brand lines.“We are not competing on product quality,she added since all the major companies are ISO certified, o
 
er a low sulphur content and use the same pipe line.
 
But if it isn’t about the product, then what differentiates the service that National Oil o
 
ers? It is a question that forces her to look outside the energy sector.
 
“Henry Ford once said that if he had asked his customers what they want, they would have said a faster horse,” she said with a laugh, “because that is all that was there at the time. But as the provider you have to be ahead of the customer. You have to ask what will they want next?”As she shepherds National Oil’s growth in a sector that has become more competitive since the discovery of commercially viable deposits of oil at Ngamia-1, she is forced to continually ask what will set National Oil apart from its competitors.“I learnt strategy implementation from a sailor,” she said proudly, and so her answer - which she acquired from a presentations by a sailor who has voyaged some of the roughest seas in the world - may herald National Oil’s second strategy change in under 30 years.
 
The state corporation’s first change of direc-tion took place in 1994 when it lost its mandate to import 30% of Kenya’s crude oil require-ments and this precipitated a diversification into downstream activities. In the last 16 years, National Oil has expanded its outlets from three in 1997 to six in 2004 when Ms Hassan-Athmani joined the company, and today it has 106 stations. They intend to double this number in Kenya by 2015.
 
This extension of services has been achieved in part through partnerships with individual land owners and the application of a cost sharing model that sees National Oil construct a petrol station on a private plot, and then recover their construction costs from sale of the fuel.This approach which sees a state corporation partnering with citizens for the first time was developed to counter the skyrocketing costs of land which created competition between companies like National Oil who wanted to set up a station and property owners who wanted to invest in land.The second tender for this partnership project closed at the end of last month and, received over tens of thousands of applications from interested Kenyans, The project secured media headlines in May when National Oil o
 
ered to build former President Mwai Kibaki a petrol station as a retirement gift. The news was received with outrage by Kenyans and members of the board who were not privy to the decision, and Ms Hassan-Athmani later confirmed that the farewell gesture, estimated at Sh50 million, was made in the spirit of the company’s public private partnership project. Former President Kibaki would provide the land and National Oil would construct the station and later recover costs from the sale of fuel.
 
National Oil has also enhanced its country-wide reach by aggressively acquiring over 60 stations from individuals and oil marketers, including BP and Somken in past years.
 
Recent media reports suggest that another buy out worth Sh25.5 billion is currently under-way, which will see National Oil take over 160 petrol stations, and the distribution infrastruc-ture of a leading marketer who intends to exit the market. Market intelligence suggests the company is Kenol Kobil which reported a Sh6.3 billion loss in 2012 from a net profit of Sh3.3 billion in 2011, after its sale to Swiss based Puma Energy fell through earlier this year. The only other major market operator is Shell which was recently sold to Vivo Energy.
Pounds to save pennies
National Oil’s projects which require a heavier capital inlay include the construction of an o
 
 shore petroleum jetty and a 90-day strategic national fuel reserves, which will help convert
Henry Ford said that if he had asked his customers what they want, they would have said a faster horse. But as the provider you have to be ahead of the customer

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