Nairobi Business Monthly
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