Saudi Aramco is set to enter the Kenyan market by acquiring US motor oil and lubricants group Valvoline which has a presence locally.

This is after the Competition Authority of Kenya (CAK) gave Aramco Overseas Company the green light to acquire the Kenyan operations of VGP Holdings as part of the global deal worth $2.65 billion.

The acquisition looks set to trigger shifts in Kenya’s fuel lubricants market, currently dominated by multinational firms such as Vivo – seller of Shell products —and Total Energies and Rubis.

Saudi Aramco is the largest oil company in the world and the second most valuable after Apple with a market capitalisation of Kes 223.86 trillion, and Apple is valued at Kes264.94 trillion.

“The Competition Authority of Kenya excludes the proposed acquisition of control of VGP Holdings LLC by Aramco Overseas Company B.V from provisions of the Act ,” CAK Director-General Wang’ombe Kariuki said in a notice.

According to top the CAK, the exclusion was provided on the grounds that it will not affect competition and that the US motor oil and lubricants group remains small in Kenya with annual sales of Kes 14.2 million.

The Aramco unit is expected to seek a larger share of Kenya’s lubricants sector and is expected to tap new markets, including fuel importation.

Aramco Overseas Company supports Saudi Aramco's operations in Europe, Asia, Australia and Africa but excludes the Saudi Arabia and North American markets.

The support involves finances, supply chain management, technical support and other administrative services.

Valvoline deals in lubricants such as brake fluids, gear oils, greases and transmission fluids and its acquisition by Saudi Aramco will offer it financial muscle and a shareholder who has a focus for Africa.

Consumption of lubricants is set to remain on the rise on the back of increased car ownership and an aggressive industrial sector.

Saudi owns more than 11,000 retail fuel stations worldwide, with locations in China, South Korea, the United States, and Japan.

It remains unclear if Saudi Aramco will use the acquisition to enter the local wholesale market for fuel which could trigger price reductions for oil marketers, ultimately passing the benefits to consumers.

The deal marks Saudi Aramco’s first direct involvement in the Kenyan fuel market, months after Kenya, through the National Oil Corporation (Nock), approached the firm for fuel supplies on credit.