Executive Summary
In this report, we have updated our valuation on Kenya’s only listed downstream oil marketer, TotalEnergies Marketing Kenya. We reinitiate coverage and retain a BUY recommendation on TotalEnergies Marketing Kenya (TKNL KN) with a fair value estimate of KES 56.30, a 60.4% upside.
In 2024, the counter’s price function gained 11.1%, albeit underperforming the broad market, as the All-Share index returned 34.1%. That said, its YTD gains (+75.5%) have outperformed the market’s (+42.8%), with the stock closing at KES 35.10 on 16th October 2025.
Looking ahead, we forecast a 20.0%y/y growth in net earnings and anticipate seeing net revenues growing marginally to KES 116.8Bn (+2.3%y/y). We estimate the full-year per share dividend to be retained at KES 1.92, representing a 67.7% payout ratio.
Kenya Pipeline Company (KPC) 2026 IPO: Value In the Eyes of the Beholder
KPC IPO is poised to be the largest equity issuance in Kenya since Safaricom’s listing in 2008 when government sold a 25% stake in the telecommunications firm to the public for a USD 800m (which was preceded by a sale of a 40% stake to Vodafone in 2000), leaving it with a 35% stake (which it has held to date). The issuance was 4.63 times oversubscribed, just ahead of the credit crisis, which peaked later that year. Request for Proposals for the consultancy services on the privatization has been issued with a deadline for submission slated for 21st October 2025. The government has set a deadline of 31st March 2026 for the listing of a 65% sale of KPC on the Nairobi Securities Exchange – providing a six-month window for the privatization process.
Just like Safaricom, controversy has continued to mar the listing with debates by the opposition in parliament, leading to the issuance of conditions for the listing. Court orders for the privatization were lifted in September 2025, but there is no guarantee that other suits will not emerge.
KPC core facilities include over 1,300km of pipeline network and at least 800,000 cubic metres of storage across various depots. It also holds 370 acres of prime industrial land (from the defunct KPRL), which would be critical for the proposed Liquified Petroleum (LPG) Refinery storage facility.
Gulf Energy submits a revised field development plan on the Turkana Oil Field after Tullow Oil Buyout
Tullow Oil plc successfully completed the sale of its entire working interest in Kenya to Auron Energy E&P Limited, an affiliate of Gulf Energy Ltd, following satisfaction of all conditions precedent under the Sale and Purchase Agreement (SPA) announced on 21 July 2025. Tullow has received the full proceeds of Tranche A (USD40 million) under the terms of the SPA. The transaction represents the sale of 100% of the shares in Tullow’s subsidiary Tullow Kenya BV, which holds Tullow’s entire working interests in Kenya, for a minimum cash consideration of USD120 million, subject to customary adjustments.
The sale of its Kenya subsidiary marks Tullow’s exit from the country after 14 years. Tullow retains royalty payments, subject to certain conditions, and a no-cost back-in right for a 30% participation in potential future development phases.
Gulf Energy has been granted some time to review and submit the adjusted field development plan. The sale slightly delays the commercialization plans for the c. 560 million barrels of recoverable oil in the basin to December 31, 2025.
Total Energies Valuation Update: Downstream Oil Marketer in Kenya Still Offers Value
We obtained a blended fair value estimate of KES 56.30 with a valuation range KES 67.42 – KES 50.26 at different levels of assumption. We thus issue a BUY recommendation for Kenya’s Total Energies with an upside potential of 60.4% from the current market price.
For FY25, we forecast a 20.0%y/y growth in net earnings to KES 1.8Bn from KES 1.5Bn in the prior year – largely on account of easing finance costs (-58.1% y/y). We anticipate seeing net revenues growing marginally to KES 116.8Bn (+2.3%y/y).
From a topline perspective, local sales contribution is expected to grow to 95.8% of net sales, up from 94.3% in FY24. Export and bulk sales are forecasted to soften by c. 24.2% y/y to KES 5.0Bn – primarily on account of dwindling volumes. Aviation, Network Sales, and General Trade are forecasted to grow by 14.3% y/y, 4.7% y/y, and 0.8%y/y to KES 4.5Bn, KES 73.5Bn, KES 33.8Bn, respectively.
