Kenya's KenolKobil says eyeing Mozambique market

NAIROBI (Reuters) - Kenyan oil marketer KenolKobil will establish operations in Mozambique in line with its strategy of securing regional markets with major port facilities, the company said on Monday.

Mozambique will be the firm's eighth market as it continues its expansion drive, aimed at achieving growth through new markets outside of its home market of Kenya. Its other markets include Ethiopia and Zambia.

"The anticipated entry into Mozambique will enhance our ability to extend our reach in the hinterland market of East, Central and Southern Africa," the company said in a statement, adding it had registered a company in Mozambique to pursue its aims.

An acquisition in Zimbabwe was still on the cards, KenolKobil added, following the unsuccessful joint bid with Engen for assets jointly operated by BP and Shell in the country.

"During our engagements with the Government of Zimbabwe and the authorities in the BP/Shell deal, we learnt lessons on how to invest in Zimbabwe, and do now fully understand the requirement of the Indigenization law," it said.

Under the law, locals should hold a 51 percent stake in any foreign firm in Zimbabwe with an asset value of more than

$500,000.

KenolKobil said the board had approved a strong capital expenditure budget to facilitate expansion in Africa. It did not provide more information.

The firm said earlier this month it expected earnings to rise this year, helping to support its share price despite a spat with Kenyan government over an oil refining contract.