Engen wins Kenya Airways deal

Johannesburg - Engen, the African energy multinational, has beaten strong competition to win a tender for the year-long supply of aviation fuel to Kenya Airways, at the Democratic Republic of Congo's Lubumbashi airport.

The agreement is for the delivery of 500 kilolitres of Jet A1 fuel. It has been running since April 9 2009 and will end on March 10 2010. Despite the time limit, the possibility for expansion exists - if not in contract period, then in scope.

Engen operates at all the DRC's airports (Kinshasa, Kisangani, Goma, Mbandaka and Mbujimayi).

The emerging African giant views the development as a breakthrough, as it seeks to leverage group aviation expertise and exploit opportunities ahead of the 2010 FIFA Soccer World Cup, thereby contributing in volume terms to its position on the continent.

"Winning this is a huge step forward for us on our Epic 2016 journey to becoming a 'Champion in Africa'," says Wayne Hartmann, GM of Engen International Business development.

Under Epic, Engen wants to be the biggest or second-biggest sub-Saharan African petroleum marketer by 2016. Thus far it has amassed 16 affiliates in the region outside its domestic market, South Africa - most of them acquired in the last three years.

Hartmann says besides acquisitions, growth into new markets like aviation is essential if the company is to realise its ambitions. It has good reasons for pursuing aviation: for one thing, South Africa is gearing up to host (and fly) millions of visitors around and into the country at the World Cup next year.

For another, Petronas, the Malaysian national oil and gas company that owns 80% of Engen, has recently established an international aviation business.

Hartmann says Petronas and Engen have maintained a mutually beneficial relationship in the 13 years of their association, characterised by leveraging off each others' core expertise and Petronas's respect for Engen's autonomy.

Since then, Petronas, the world's 19th-largest petrochemical group, has acquired first-rate aviation knowledge. That and its procurement muscle will prove an immense boost to Engen's standing in the aviation market.

For now, this market is in the DRC. The country's eastern region has been lying fallow for some time as unrest recently re-emerged, prompting Shell to depart and Engen to enter it in December 2007.

"Engen is committed to the DRC, Africa and aviation," Hartmann says. "In our quest for sustainable opportunities that benefit both our business and the countries in which we operate, Engen will always be a key economic contributor and a responsible operator."

- I-Net Bridge