London Firm Seeks Nairobi Listing As It Eyes Oil Boom

Guernsey-based oil sector services firm Africa Oilfield Logistics plans an NSE listing with an eye on the promising Kenya upstream oil sector.

An oil rig at Ngamia 1 in Turkana. Logistic firms are targeting the Kenyan upstream oil sector as more oil and gas deposits are found. PHOTO | FILE

An oil rig at Ngamia 1 in Turkana. Logistic firms are targeting the Kenyan upstream oil sector as more oil and gas deposits are found. PHOTO | FILE

The operator, which is focused on logistics support for upstream oil and gas exploration in sub-Saharan Africa, is already listed on the London Stock Exchange Alternative Investment Market Segment (Aims).

The oilfield services (OFS) firm is, however, yet to disclose whether it will list by introduction or seek to raise capital locally.

Africa Oilfield runs its Kenyan operations through subsidiary Ardan Risk & Support Services, which also has offices in South Sudan, Ethiopia, Djibouti, Tanzania, Mozambique, Zimbabwe, Madagascar and South Africa.

“East Africa, our area of strategic focus, is rapidly becoming an economic centre and a hub of continental growth, fuelled to a large extent by the rapid development of resource assets in the region,” said Africa Oilfield CEO Carl Esprey in a statement.

The firm took up a 49 per cent stake in Nairobi’s Ardan in August 2013 for Sh350 million ($4 million), with an option of full acquisition of the remaining stake within a period of three years. It last month announced it would exercise the full takeover option.

The acquisition will be in form of a reverse takeover, which will see the combined entity rebranded Atlas Development and Support Services.

Africa Oilfield announced in disclosures filed last week that the capitalisation of the new London Stock Exchange entity will be £36.4 million (Sh5.2 billion). It currently employs 800 people in the Kenya oil and gas sector.

According to the disclosures, Ardan’s unaudited revenues for the six months ending June 30 stood at $20.6 million (Sh1.8 billion) while those for the full year ending December 31, 2013 were $22.5 million (Sh1.95 billion).

On September 15, Africa Oilfield announced Ardan had entered into a 15-year lease over “a sizeable plot in northern Kenya”, which will be used for warehousing, fuel distribution, cold storage and fleet maintenance.

In addition, the company is negotiating an option over a further 25 acres of land in the vicinity.

“This land which will develop into the first of several planned logistics hubs will support Ardan’s technical division and its expanding operations in Northern Kenya centred on the rapidly growing oil exploration and production industry in the region,” said Mr Esprey.

The growth of logistic firms targeting the Kenyan upstream oil sector has been informed by significant oil deposits and gas potential in the country.

In April Frontier Service Group Ltd, whose chairman is ex-Blackwater CEO Erik Prince, announced it had invested about $14 million (Sh1.2 billion) for a 49 per cent stake in Phoenix Aviation to service the sector.

– Business Daily