House team probes Sh6 billion NOC-Rubis deal

A parliamentary team has commenced investigations into the proposed Sh6 billion deal between the National Oil Corporation of Kenya (NOC) and Rubis Energy Kenya Ltd.

The National Assembly Energy Committee is now looking into how the deal was brokered.

The committee is also seeking to understand the fine print and financial implications of the deal that is to make Rubis the non-equity strategic partner with NOC and take over the corporation’s operations. The tenure of the non-equity strategic partnership will be eight years, renewable once.

This emerged Thursday after NOC Chief Executive Officer Leparan Morintat appeared before the committee for questioning over the deal.

Session committee chair Tom Odege directed that NOC ="https://www.standardmedia.co.ke/financial-standard/article/2001493724/inside-sh5b-noc-rubis-deal-to-revamp-cash-strapped-oil-marketer">convenes a quadripartite meeting< between itself, the Committee, the office of the Attorney General and Rubis Energy to deliberate on the multi-billion deal.

 “We want to get deep into the agreement between yourself and RubisThe meeting should happen in the next two weeks. We recommend that the Attorney General and Rubis join us so we can get more details on the same,” said Odege.

Vice chair Lemanken Aramat emphasized that the committee needed time to go through the report tabled by NOC and a meeting held thereafter to deliberate on the same.

“The issues (with this contract) are very weighty and can not be discussed in one meeting. We need a retreat where all the parties can attend and we are able to get details,” Aramat said.

In his submissions to the committee, Morintat explained that the deal would see Rubis come on board and inject Sh6 billion into NOC for capital expenditure (renovation, rehabilitation and revitalisation of assets) and working capital to finance stocks.

“In order to build capacity and promote a business-first culture and operational excellence mindset, Rubis will ="https://www.standardmedia.co.ke/business/news/article/2001437648/state-owned-national-oil-corporation-seeks-sh13-billion-capital-to-stay-afloat">undertake capacity building< and skills transfer through training, a staff exchange programme and management support,”  Morintat submitted.

The CEO also said that the decision to partner with Rubis was as a result of the decision by the Cabinet to revive and commercialise the National Oil Corporation. The decision, he said, was arrived at on August 8, 2023 and the Cabinet Secretaries for Energy and Petroleum, and the National Treasury were tasked with implementing the Cabinet decision.

“Pursuant to the Cabinet approval, NOC was directed to undertake the on-boarding of non-equity strategic partner(s) on profit-sharing basis. It is important to note that the Cabinet approved the onboarding of a strategic partner on a profit-sharing basis and not the privatisation of the corporation,” said Morintat.

The probe by Parliament comes at a time NOC is struggling with a huge debt profile. Documents reveal that as of January 31, 2025, the corporation’s total debt owed to various creditors and banks stood at Sh7,98 billion. Of this, Sh3 billion is owed to KCB and Sh2.837 billion to Stanbic.