STRATEGY - DIRECTION - GOVERNANCE
UNOC’s purchase of 20.15% shares in the Kenya Pipeline Company was a masterstroke in commercial petroleum investment.The Uganda National Oil Company (UNOC) is the commercial arm of government established under the Petroleum (Exploration, Development, and Production) Act and the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act.
One of the objectives of UNOC is to manage the government’s commercial interests in the petroleum sector, both in and out of the country. Following the amendment of the Petroleum Supply (Amendment) Act in 2024 by the Parliament; UNOC was proffered with the sole and exclusive role of importing petroleum products, which action before amendment of the law was being performed by the Oil Marketing Companies (OMCs).
This amendment was triggered by Kenya’s policy shift in fuel trade from an open tender system to government-to-government system.
Following that amendment UNOC now directly imports petroleum products and in turn supplies to Ugandan Oil Marketing Company’s (OMCs) which move eliminated intermediaries in the petroleum products value and supply chain.
When the Kenyan Pipeline Company was still wholly owned by the Government of Kenya, Uganda relied largely on bilateral relations to ensure uninterrupted supply. Considering that Uganda is a noncoastal country, UNOC opened a branch in Kenya to facilitate collaboration with stakeholders such as the Kenya Pipeline Company (KPC) with a view of achieving seamless transition of petroleum from Mombasa to Nairobi & Eldoret and finally to Uganda.
Upon the privatization of the Kenya Pipeline Company, an Initial Public Offering (IPO) which closed
in February 2026 was issued as a precursor to its listing on the Nairobi Stock Exchange. This IPO saw UNOC purchasing a 20.15% equity in Kenya Pipeline Company after rigorous negotiation and lobbying with the Kenyan government considering its shares were offered under divesture between a pool of potential investors.
UNOC and the Uganda government negotiated remarkably making UNOC the second most significant shareholder in Kenya Pipeline Company after the Kenyan government which owns 35%.
As a result of the investment, Uganda is assured of the following:
1.Regular and stable fuel supply
2.Certainty to access and affordability of petroleum products which is much needed as over 80%
3.UNOC is now able to exercise its shareholding through participating in the appointment of at least two directors and also holds veto power towards crucial management decisions such as on dividends and tariff changes.
4.Kenya Pipeline Company’s board of directors in its public announcement 29th July 2026 appointed two formidable Ugandans among its five non-executive directors the said move continues to strengthen Uganda’s commercial interest in Kenya Pipeline Company.
Prior to purchase of shares in Kenya Pipeline Company, UNOC was facilitating the importation of petroleum products through a transportation and storage agreement entered into with Kenya Pipeline Company.
The purchase of shares in Kenya Pipeline Company by UNOC demonstrates a strategic investment in oil and gas infrastructure within the East African region and reflects a commitment to advancing the objectives of economic cooperation among East African Community member states through bilateral cooperation. In this regard, UNOC could consider strengthening its collaboration with the other shareholders to foster a common approach towards achieving the pipeline’s business objectives.
The investment could also provide an opportunity for UNOC to enhance the inflow and contribute to greater price stability of petroleum products. Additionally, UNOC may wish to consider expediting the development of its domestic storage infrastructure, particularly the Kampala Storage Terminal(s) at Buyala along Mityana Road and the proposed facility at Mpigi, as this could further support the security and stability of petroleum product supplies to consumers.
