By Brian Yatich
With East Africa’s oil and gas industry now pluming in the wake of new mine fields, oil firms and explorers are rushing to these rich hunting grounds in the hopes of stumbling on big profits.
The region is experiencing increasing demand for energy, which has gradually opened up opportunities.
According to a 2018 report, African Oil and Gas State of Play by Deloitte, recent oil and gas discoveries coupled with regulatory changes and fast-growing energy demand from expanding local consumer markets offer significant opportunities across the continent.
The report further indicates that in African energy-exporting countries, oil and gas has historically been a primary driver of economic growth with Oil exports accounting for more than 90 per cent of revenues and the bulk of fiscal revenues.
The industry has subsequently created massive opportunities for the East African economy; ranging from Oil & Gas exploration, port development and Management, LNG plant engineering, Pipe Line Infrastructure as well as new refinery developments.
The commodity boom is an unprecedented opportunity for the continent, and the East African region at large.
As one of Tiba Group’s most prominent brands, Tiba Oil continues to broaden its remit and reach, re-affirming itself as one of the continent’s leading privately-owned energy solutions providers.
The oil marketing firm was incorporated in 2007, with the main business of selling petroleum, before it moved to the resell business.
“Tiba oil is an oil marketing company registered and licensed by ERC through the Ministry of Energy, we basically sell petroleum products to local markets and we export to the neighboring countries such as Uganda, South Sudan and Congo,” Noor, Chief Executive Officer Tiba Oil says.
“There were conditions for Tiba oil to fulfill for it to be an oil marketing company and to get the license of importation. We fulfilled the conditions and got our first license in 2012.”
Tiba Oil has been actively engaging in the procurement, trading, transportation and management of petroleum products in both East and central African markets, penetrating some of the most hostile locations in the region; the eastern Congo and South Sudan, undeterred of the impervious market.
“Our market is based on honesty and trust. In Eastern Congo, we are largely based there and remember Eastern Congo is held and controlled by the rebels, yet it is ironically doing well compared to other markets we are covering,” he reveals.
Noor further reiterates that the Company is always on the look out to identify opportunities within Eastern and Central African markets.
“We are not afraid of taking risks and we believe in the continent’s potential and providing solutions that will better people’s lives as well as move Africa forward.”
In Kenya, Tiba Oil has made phenomenal inroads in a relatively short time, covering the Coastal region, Western Kenya and the Rift Valley.
With barely a decade in market, the brands’ rise since inception has been rapid yet strategic; and its subsequent portfolio is testament to this evolution.
One of Tiba Oil’s Key strengths, Noor notes, has been its top management which has been instrumental in the company’s expansion both domestically and regionally. The management has a strong appetite for development and not afraid of taking on projects outside of their comfort zone.
“The activities of Tiba Oil are centered on the objective of becoming a first class regional Company with international posture. We provide our services for major industry players in east and Central Africa, riding on our name,” says the CEO.
In Uganda, South Sudan and Eastern part of Congo we’ve retaining a prestigious position among other indigenous businesses trading in Africa’s oil and gas sector”, he says.
Leveraging on this saturation, Tiba Oil markets a range of petroleum products, including Diesel, Premium Motor Spirit, Gasoil, Kerosene, Fuel Oil and Bitumen.
With the constant fuel price fluctuations, and uncertainty in global markets, the CEO notes that he wants to see stability in terms of commodity pricing.
“There is a lot of products coming to the market which is affecting the market demand and supply, if you have more products in the market and what you are competing with is small pie, it’s a big challenge,” he says.
He indicates that the markets price volatility is a factor that has increasingly affected the industry’s profitability. “This calls for continuous review of our supply chain and partners in order to increase efficiency for sustainable profits and growth.”
With the oil and gas sector now plugged to be the region’s next big thing, Tiba Oil is looking to capitalize on this opportunity calling for more sound policies and better framework.
“To exploit the opportunities lying in the oil and gas sector the government and policymakers need to give more attention in engaging the industry around policies for local content, and efforts to develop and support infrastructure as we move towards commercializing and production of petroleum,” Noor notes.
To ensure effectiveness and value addition, Kenya’s President recently signed into law the petroleum Bill 2017, exuding confidence in the sector on the level and intensity of commercial energy use as a key indicator of economic growth and development in the region.
This offers a sigh of relief for Oil firms in Kenya including Tiba Oil, as it encourages investments in oil and gas by complying with local content requirements, which include upstream operations, locally manufactured goods and employment opportunities.
Growing Tiba Oil
Currently, Noor says the petroleum market is very unpredictable citing that it is cash incentive to expand.
“We have bigger plans but it depends on the petroleum industry, it’s unpredictable because currently we are selling losses, and if we sell losses within three to five months remember we are losing a lot. Everything with business is on timeline, we have to make payments, you have to sell this product on time and whatever you are competing with is on time because the market is as well shrinking,” he cites.
“Currently we deliver Western and we give them on credit base within one month, survival tactics that’s how we survive.”
Noor however points out that currently the petroleum market is experiencing slowdown because of demand and supply factor, “because we are getting many competition from Tanzania the neighbor’s country that we used to deliver, even Rwanda they are going to Tanzania because of many reasons.’
With the growing petroleum market appetite, Tiba Oil’s strategy is continuing to shape.
“In the next five years, I know things will change in regards to the oil and Gas market, if things change for the better then we can expand more, we have good strategy where we wanted to invest locally adding petrol stations across the country,” he says.
To lower the firm’s risk, Tiba oil is looking to diversify its business, moving away from oil marketing to real estate.
“We want to diversify from petroleum to real estate; we have already started in Kenya. The only good thing about real estate is that you get nothing to lose because the demand is there, so we are going there,” he says.
Familiarity has proved key for Noor, having been involved in the family business since his high school education, drawing strength and passion for customer service and business management.
Moreover, attracted by a career in Supply Management, now 33 years old running Tiba Oil, Noor is slowly driving change by embracing the values of the company.
He is confident that Tiba Oil will be one of the best oil marketing companies in terms of customer service, profitability and in adopting environmentally friendly policies to become a pacesetter in the industry.