Sale of BP Africa worries Zambian shareholders

21:35, April 01, 2010      

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Zambians who are shareholders in the British Petroleum (BP) oil firm have expressed worry over the sale of 75 percent shares of BP Africa, saying their investments will lose value on the stock market in the country.

The British petroleum giant recently said that it would sell its marketing operations in Tanzania, Malawi, Namibia, Botswana and Zambia after a review of its African operations.

BP controls about 60 percent of the oil business in Zambia and is the sole supplier of Jet fuel at all airports.

Spokesperson of Zambians who have shares in BP Zambia Plc, Nasson Nswana has told the company' s board in Lusaka that their investments will lose value on the Lusaka Stock Exchange (LuSE), the Zambia Daily Mail reported on Thursday.

He said most shareholders were worried about what will happen to their shares if the company exited the country, saying the company should give a clear explanation.

But BP Zambia Plc Chairperson, Jacob Sikazwe advised the shareholders not to be panic and sale off their shares as the company had not been sold.

He explained that the company had done a firm global portfolio review on how it could improve business and create value operations, hence the decision to pull out of Zambia and other countries, adding that the review of both upstream and downstream factors revealed that the firm wanted to concentrate on exploration and productive areas as opposed to the downstream side where the firm had decided to phase out refining and marketing segments.

"The firm decided a number of marketing activities that are not core to the business so it wants to concentrate on exploration and production activities, hence the decision made globally," Sikazwe was quote as saying by Daily Mail.

He assured the shareholders that once the company is sold, BP Africa will ensure that their shares are intact and protected.

"So, in Zambia BP is listed on LuSE (Lusaka Stock Market) and it will sell 75 percent shares, not the business. Once sold, there will be a buyer. The business is intact until such a time that shares are sold. We will ensure that shares are protected," Sikazwe was quoted as saying.

Responding to the BP pullout announcement earlier last month, Kenneth Konga, Zambian minister of energy and water development assured public that the Zambian government was confident that another competent investor would take over the assets of the British oil giant.

Andrew Kamanga, an energy expert in Zambia, also told Xinhua soon after BP's announcement that the fuel giant's withdrawal would not affect the oil business in Zambia, where the industry was currently competitive with many possible substitutes.

"There will be no effect whatsoever," he said then. "The business is now competitive unlike 10 years ago."

But officials from the Tourism Council of Zambia (TCZ) said they were worried that BP's pullout may have negative effect on Zambia's tourism industry as the fuel giant is the sole supplier of Jet fuel at all airports of the country.

Mark O'Donnell, Chairperson of TCZ, told media a few days after BP's announcement that the pulling out of BP will affect the tourism industry, saying there would be an interruption in the supply of fuel to the airports, which in turn will affect tourist arrivals.

O'Donnell said aviation fuel was a complicated business compared to other fuels, saying BP was the only oil firm with that expertise in Zambia.

"Aviation fuel is not a common product. It requires specialized attention and safety standards and I don't think anyone can do it if BP pulls out," he said.

According to O'Donnell, the situation had been complicated by the few number of aircrafts in the country, a situation that implies that should BP pull out, it would be difficult to find alternative suppliers of the commodity.

Source:Xinhua

(Editor:梁军)

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