Puma Energy, a Geneva registered oil company, has signed a deal to acquire majority shares in a Kenyan oil company Kenolkobil. The agreement is conditional on due diligence and regulatory approval, according to a press release.

Kenolkobil is listed on Nairobi securities Exchange and is one of the largest oil marketing companies operating in 10 African countries. Puma Energy has set sights on Rwanda, Kenya, Uganda, Ethiopia and Burundi as it seeks to establish its foothold on the African continent.

The total cost of the stake is US$2.5 billion including any subsequent transaction, which is restricted to due diligence and regulatory approvals, the statement said.

Puma energy has a storage capacity of 180,000 cubic metres, 400 retail service stations and 557 employees.

Once the deal is finalised, the Israel company is targeting to invest in Rwanda in storage facilities, added the release.

The Minister of Trade and Industry, Francois Kanimba, said land had been identified in Kabuga, about 30km from downtown Kigali, for the construction of oil storage facilities.

The minister said some investors had started to put up facilities, but that others were awaiting the government’s plan for strategic reserves.

Two months ago cabinet approved a draft bill governing oil business in the country.

"Many investors have expressed interest in building storage facilities and, as a landlocked country, we need them...at least to run for four months,” Kanimba said.

Under the proposed legislation, oil importers are requested not to go under one month of commercial reserves per year. Government is also planning to invest in reserves that can run for three months come the year 2017.

Currently Rwanda has 8 million litres of strategic reserves.