| dc.description.abstract | Kenya Petroleum Refineries Limited (KPRL) is an oil refining company based in
Mombasa which was originally set up by Shell and BP. It was incorporated in 1960 to
supply petroleum products to Kenya and the East African region. The Government owns
50 % (since 1971) of the equity in KPRL with Shell and BP each holding 17.1 % while
Chevron holds 15.8% of the equity. Complex I was commissioned in 1964 and Complex
II in 1974. The last major investment in KPRL was therefore in 1974 when complex 2
was commissioned.
KPRL was the main supplier of products into Kenya and the East African region until
1994 when the oil industry was partially deregulated. The liberalization of oil the industry
allowed new entrants to enter the business of importation and marketing of petroleum
products.
The study sought to establish the changes in KPRL's business environment, the level of
turbulence and both the strategic and operational responses that have been put in place.
The study has established that:-
i) there has been changes in policy, legal, regulatory and institutional framework
brought about by the enactment of the Energy Act, Environmental
Management and Control Act as well as the publication of new standards for
petroleum products.
ii) Although, the demand for petroleum products has grown from 2.383 million
tons in 2002 to 3.069 million tons in 2006 driven by economic growth,
KPRL's production has remained steady at 1.6 million tons per year over the
same period.
iii) Some marketing companies have responded to the changes by developing new
markets in the region, development of new products such as convenient stores
. and restaurant franchises as well attempting to differentiate their products eg
the promotion and marketing low sulfur diesel.
iv) KPRL's strategic response was to concentrate in its home market and with the
same product. Operationally, KPRL responded by increasing the automation
of its processing and storage facilities, purchase of new catalyst to obtain
incremental increase in performance, improved performance 10 the
management of human capital and investment of finances in low risk assets.
v) KPRL possesses some distinctive capabilities which include location, land,
plant and equipment, pipeline network for distribution of products and a
strong culture in health and safety.
vi) Some stakeholders believe that there is room for improvement in the
fulfillment of customer requirements both in terms of quantity and quality
aspects of products.
vii) Equally some stakeholders believe KPRL needs to do more to increase the
profile of its corporate image at the national level. | en |
