April 17, 2013 / 11:55 AM / in 5 years

Vivo Energy to invest $200 million in African fuel sector

* Private firms vie for bigger stake in African fuels

* Chairman says plans to enter three new countries

* May consider further expansion in east Africa

By Emma Farge

LAUSANNE, April 17 (Reuters) - Vivo Energy, a joint venture between oil trader Vitol, Royal Dutch Shell and Helios Investment Partners, will invest $200 million in Africa’s fuel sector and plans within months to enter three new countries, its chairman said.

Vivo, formed in 2011 when Vitol entered the African fuel storage and distribution business and took a 40 percent stake, is still dwarfed on the continent by France’s Total but the new investment could narrow the gap.

“We’ve got big capital investment plans. We plan to invest $200 million over the next few years. We’re opening 50 new stations a year,” Paul Greenslade said at the FT Global Commodities Summit in Switzerland.

Vivo has around 1,300 service stations in Africa, which operate under the Shell brand, compared with Total’s 3,500. Helios owns 40 percent of Vivo and Shell owns the remainder.

Puma Energy, a subsidiary of top oil trader Vitol’s rival Trafigura, has about 350 service stations in Africa.

Energy traders have historically shipped Africa’s oil onto global markets but now also view the continent as a destination for fuels and are investing in storage and retail networks to benefit from high economic growth rates.

Some of the most alluring assets are in Africa’s fuel market, which is set to grow by 40 percent by 2020 to 4.3 million barrels per day, according to Ecobank Research.

Addax & Oryx Group is also a large operator in the African downstream sector via its subsidiary Oryx Energies and recently said it would invest $400 million over five years.

Greenslade told Reuters that Vivo, already present in 15 countries, planned to expand into West Africa’s Ghana and Togo and the Indian Ocean island Reunion in the next few months.

He added that Vivo, which already has a presence in north and west Africa, including Morocco, Tunisia, Ivory Coast and Guinea, would consider further acquisitions in the east, where it is present in Kenya, Uganda, Madagascar and Mauritius.

Kenyan fuel marketer KenolKobil said in March that talks to allow Switzerland-based Trafigura subsidiary Puma Energy to take it over had been terminated, confirming recent market speculations.

Asked if Vivo would consider buying KenolKobil, Greenslade said: “We might consider it of course. At the moment, it’s important to consolidate what we have.”

Vitol rival Trafigura also has a strong presence in the African downstream through Puma which it may list in 2014.

Asked if Vivo Energy would consider a flotation, Greenslade said: “We are in the process of building the business as opposed to worrying about what we do with it.”

Vivo does not publish its profits publicly.

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