Lexo Energy which is a Netherlands-based company offering fuels and lubricants in the East African market has launched operations in Kenya, making Nairobi its second African destination.
The latest oil marketer to join the Kenyan market, Lexo Energy, is backed by a multi-billion-shilling war chest with which it plans to open up to 25 new petrol stations before the year ends.
This entry is opposed to a recent trend in which Western multinationals have been exiting Africa’s petroleum retail market to focus on upstream operations.
In Africa, besides Kenya, Lexo Energy also has operations in Mauritius.
Lexo Energy Nairobi office manager Koki Mulwa said there are plans to have between 15 and 25 petrol stations before the end of the year. Recently, the company opened two stations in western Kenya in Mumias and Busia, and is now geared up towards setting up retail operations in the capital and other major towns.
However, Lexo Energy did not disclose its expansion budget, but estimates from the energy sector regulator put the cost of a stocked petrol station at about $1M
This means the new 25 stations could cost $25m.
Lexo Energy’s entry comes at a time when the Anglo-Dutch firm Shell, whose headquarters are also in Netherlands, is on its exit from the local retail market with the planned sale of its stake in Nairobi-based Vivo Energy— Shell licensee in 16 African markets.
Shell has plans to sell off its remaining 20% stake in Vivo Energy to Vitol which is another Dutch company, for $25.7b in its divestment process that began back in 2011.