And forget KK for a moment. Other OMCs pissed off at KPRL.

http://www.standardmedia...oil-supplies-in-jeopardy

@VVS, you never fight the government, it always has something to pin you down. Ask Africa's richest man Dangote.

Already major oil marketers are threatening not to abide by Petroleum (Amendment) Rules 2012, under Legal Notice No 24, that requires them to buy 40 per cent of their stock from the Mombasabased KPRL. They claim the aging and inefficient equipment at the facility,coowned by the government and India’s Essar Oil on 50-50 basis, is piling costs due to poor products.

“All marketers have not signed the off-take agreements for next month,” said a chief executive of one of the major nine companies that control 86.4 per cent share in a market with over 70 players. This could throw the country into a crisis as all citizens regardless of their socio-economic status directly or indirectly rely on petroleum products for survival.

Industry players on April 19, through the Oil Industry Supply Coordination Committee, wrote a joint letter to the Government demanding efficiencies at the refinery. They also demanded compensation of Sh7 billion arising from operational inefficiencies at the facility following an audit report by Deloitte that has nonetheless been disowned by KPRL.

http://www.thepeople.co....-sitting-on-a-time-bomb/

@VVS, you are extremely persuasive with your deep yet succinct analysis of KENOL/KOBIL and indeed the downstream oil market.

Nonetheless, after attending the KK AGM, I was left with the distinct impression that KK WILL report a 1/2 year loss and possibly a full year loss, notwithstanding improvements that have been made so far. I doubt that the sale of assets will have happened in H1 and that appeared to be the only source of "profits" that could materialize in H1.

This is given that Segman and his CFO admitted that Q1 was a net loss position given the fact that some of the hedging losses continued into Q1 2013, not to mention the huge financing costs that the company continues to incur to date.

Granted, I can see that KK is now in recovery mode, but I reckon that a further loss will continue to dampen the spirits of KK investors and would be investors. The fact that Segman came out clearly that there are currently no negotiations for the sale of a stake in KK will also serve to deter speculative investors getting in to cash in on takeover talk.

This has clearly been demonstrated by the steady decline in the share price since the AGM. For this reason, I stand by my previous buying level of Kshs 9 and below, given the fact that any buyers will most likely have to be prepared for an earnings/dividends famine until next year.