Zimbabwe: French oil group Total victim of Black empowerment regulation?

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Total (Zimbabwe), a French registered oil company is being investigated for allegedly refusing to sell some of its expansive asserts to black businesspeople in a bid to retain it monopoly. This comes as black oil players seek to take advantage of recently gazetted controversial empowerment regulations that compels foreigners to sell 51 percent stakes.

Investigations commenced at the weekend led by the country’s Competition and Tariff Commission.

Disgruntled fuel operators claim that attempts to force Total (Zimbabwe) to dispose some assets to them are being blocked by senior officials.

Total (Zimbabwe) has scores of fuel stations countrywide with some being 500 meters from each other.

The oil company took over Mobil Oil (Zimbabwe) in December 2005 resulting in it controlling 45 percent of Zimbabwe’s petroleum business. Its reputation as the biggest storage capacity in the country has infuriated Black oil players.

“Total still has two or more depots co-existing in Harare, Bulawayo, Masvingo and Gweru among other areas and this translates to excess”, National Oil Company of Zimbabwe (Noczim) marketing and distribution director Chrispen Mashange said.

“We also have cases whereby Total Service stations are found 500m apart and that too translates to excess. We think that Total should have disposed of some of the sites that co-exist as holding onto them is blocking competition” Mashange told the probe team.

Fair value

Some players in the fuel sector allege that Total was demanding “reckless and outrageous” prices for the assets which are now too old to be sold at high prices.

They claim Total was charging US$35 000 for a tank installed more than 15 years ago but a similar brand new tank costs US$7 000 in South Africa.

Said Sakunda, Energy managing director Kuda Tagwirei, “We are not being given a fair value and we need an independent evaluator who will act as a referee and give us a fair value of the assets we want to buy. The values that Total has been pushing for in some cases are three to four times values of new assets in South Africa.”

Total representative, strategy director Stanley Hatendi told the commission that his company had identified the excess assets as per agreement and was only asking for a value they felt was fair to the company’s shareholders.

The players said they wanted to buy Total’s assets because they cannot get land to build, as municipalities across the country are saying that there are too many service stations in the country.

However, observers say the black oil players want to take advantage of the recently gazetted controversial empowerment regulations that compels foreigners to sell 51 percent stakes to blacks. The regulation took effect on March 1.


The gazetting of the regulations sparked disputes within the country’s inclusive government. Prime minister Tsvangirai has insisted that the regulations were published without due process as detailed in the constitution. He also pointed out that the law was short-sighted and destructive as it would scare away potential investors who were willing to give the inclusive government the benefit of doubt.

The MDC views the law as too harsh for a country that still needs to attract foreign investment and recover from a decade long unprecedented economic recession. They blame the collapse of the economy on what they describe as Zanu-PF’s populist policies.

Late last year Germany protested to the Zimbabwe government after the Affirmative Action Group (AAG) threatened to expel Bonn-based international courier services firm DHL unless it appointed a Zimbabwean to head its local operation. AAG is a radical black empowerment lobby group which has strong links with Zanu PF, President Robert Mugabe’s party.

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