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Privatisation advisory services

Kenya Pipeline Company

Kenya Pipeline Company (KPC) has a 900-km pipeline network, servicing seven major terminals and additionally an airport hydrant system. The pipeline handles four million m3 a year of white products from Mombasa on the coast through to the border with Uganda.

Channoil, working together with a lead financial and legal advisor, was called in by Kenya's Privatisation Commission to advise on KPC's privatisation. We undertook a comprehensive review of the options available, made recommendations for the privatisation process and delineated the effect of the options on KPC.

During the course of the two-year project we made a detailed 10-year forecast of the demand for petroleum products in the countries served either directly or indirectly by the KPC network, namely Kenya, Uganda, southern Sudan, Rwanda, Burundi, eastern Congo and northern Tanzania. To help in this, we built a demand model for the network to predict its operability and the likely pinch points, advising as necessary on how to improve KPC's operating performance and circumvent the pinch points.

We undertook technical due diligence work on the network's hardware, which included four pipelines, 26 pumping stations, the seven terminals with their 600,000m3 of tank storage capacity, and the airport hydrant system.

We looked, too, at the pipeline's maintenance and downtime history as well as reviewing KPC's fire-fighting and safety systems and its environmental performance.

Kenya Petroleum Refinery

Also in Kenya, Channoil worked on behalf of the two shareholders of Kenya Petroleum Refinery to examine the implications of converting the refinery from a toll operation to a merchant mode, exploring any margin protection mechanisms that would support such a change of operation.

Downstream oil infrastructure in Zambia

Channoil acted as the industry and technical experts on this World Bank-funded project, advising the Zambian Privatisation Agency on the restructuring and privatisation of the downstream oil sector.

We undertook a review of the oil market in Zambia and examined the role of state-owned companies in the local economy, also carrying out a valuation of the Tazama pipeline, the Indeni refining facility and various storage businesses. As a result of this work, we were able to put forward various restructuring and privatisation options.

Jordan Petroleum Refining Company

Channoil acted as lead advisor to the government on the privatisation of Jordan Petroleum Refining Company (JPRC). The assets involved included the Amman refinery, oil storage terminals, transportation facilities, and airport depots and hydrant systems, as well as LPG storage and bottling plants.

 Our work entailed arriving at valuations of JPRC's main assets, carrying out technical due diligence on all assets downstream of the refinery and advising on privatisation strategy options.

Enemalta: Malta

Channoil provided commercial and technical input to the team advising the government of Malta on the privatisation of Enemalta, the country's main generator and distributor of energy.

As well as conducting a review of the local oil industry, we evaluated the various bids for validity and content as well as for the suitability of their proposals for the upgrading and subsequent maintenance of Enemalta's storage and distribution sites. We also reviewed the bidders' business plans, commenting on their validity and robustness but paying particular attention to the measures proposed by the bidders to ensure third-parties could market oil products in Malta on a free and fair basis.

In addition, Channoil's engineering specialists inspected Enemalta's oil terminals to determine what needed to be done to make sure they met the EU's safe operating standards and also to provide an estimate of the cost of any necessary upgrading.

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For more information,
Phone: +44 20 7583 7873
Email: consult@channoil.com