Government Initiates Comprehensive Review of NOCK's Sh3b Contract with Rubis, Due to Parliamentary Directive
Struggling NOCK Under Special Audit Over Sh3 Billion Rubis Deal
The National Oil Corporation of Kenya (NOCK) is currently undergoing a special audit ordered by Parliament due to concerns over its financial collapse and a Sh3 billion partnership with Rubis Energy Kenya. The Public Investments Committee has suspended the implementation of the NOCK-Rubis agreement for one month pending the audit report, which the Auditor General is expected to submit by August 14, 2025.
The audit was prompted by NOCK’s deteriorating financial condition, including debts of Sh3.4 billion to Kenya Commercial Bank and Sh2.9 billion to Stanbic Bank, raising risks of default and questioning the agency’s sustainability. MPs have expressed fears that the Rubis partnership, which involves leasing retail infrastructure to third parties without Rubis acquiring equity, may worsen NOCK’s operational challenges, potentially exposing the corporation and taxpayers to greater financial risk.
In a bid to manage debts and initiate recovery, NOCK’s CEO indicated that the Rubis deal was intended to help. However, parliamentarians argue that this arrangement might only be a short-term fix that threatens the Corporation’s original mandate and financial health. The audit outcome will influence decisions on NOCK’s future and could set important precedents on structuring non-equity partnerships in public institutions.
The partnership between NOCK and Rubis Energy is being questioned by MPs regarding its legality. Parliament has directed the Auditor General to examine the legal basis and process of onboarding Rubis Energy as a strategic partner. The audit will determine the financial nature of the capital provided by Rubis Energy, whether it is a loan, and its terms, interest rate, securities involved, and government guarantee.
In addition to the Rubis deal, the audit will also review the state and future of the National Oil Corporation (NOCK). The audit will assess the impact of the Rubis deal on NOCK's existing contracts with other retailers. It will also investigate the lack of equity participation in bringing in Rubis Energy, potentially exposing the Corporation and taxpayers to greater risk.
The audit will also scrutinize NOCK’s ability to meet its recurrent expenditures, including staff salaries and maintenance of its fuel stations. The Corporation has been unable to meet these expenses, adding to its financial woes.
The debt crisis of NOCK, estimated at Sh7.4 billion, remains unresolved. The Corporation's sustainability has been called into question due to financial mismanagement, rising debt, and opaqueness in operations. The audit will provide much-needed transparency and accountability to address these concerns.
The audit is a significant step towards restoring public trust in NOCK and ensuring the Corporation operates in the best interests of Kenyans. The outcome of the audit will be tabled before Parliament by August 14, 2025, providing insights into the Corporation's financial health and the viability of its partnerships.
[1] Parliament orders special audit of NOCK over Sh3 billion Rubis deal [2] Rubis Energy deal: MPs question NOCK's financial health and equity participation [3] NOCK-Rubis agreement suspended pending special audit [4] NOCK's debt crisis: Sh7.4 billion and counting [5] Auditor General to table report on NOCK by August 14, 2025
- The NOCK-Rubis Energy partnership, amidst concerns about financial sustainability and equity participation, could have implications beyond just the sports or general-news sector, potentially impacting the business and politics landscapes as well, given the significant financial stakes involved.
- The special audit of NOCK, delving into the Sh3 billion Rubis deal and the corporation's financial situation, could set important precedents in the field of finance, influencing future partnerships not only in the oil and gas industry but in other public institutions as well.
