OVH Energy Marketing, formerly Oando Marketing Limited (OML) has stated that it will not invest in building private refineries but serve as partner of choice to any government or private refinery that goes into operation, so as to address the distribution challenges in the downstream sector.
Speaking to journalists in Lagos over the weekend, the Chief Executive Officer of OVH Energy Marketing, Mr. Yomi Awobokun argued that petroleum products are not yet distributed equitably in Nigeria, adding that any refinery that goes into operation will face the distribution challenges.
He said his company’s expansion plan would remain in distribution from retail stations to engineering and logistics.
“I believe that whoever invests in refinery will have one problem – it is to distribute the fuel he produces. And so, our first priority is to ensure that eventually, when Nigeria is self-sufficient, we are able to distribute and hopefully export. So, at the moment, there are no refining plans for the company. The plans are to grow the company to a point that it is able to support whoever makes that investment,” he said.
“The biggest expansion plan we have will remain in distribution. Believe it or not, fuel is not distributed in this country equitably yet. It is very easy to see it in Lagos and believe that it is. But a trip to different parts of the country will tell you that the supply chain is not yet perfect. And so, our first priority is to grow that capacity and it is tough – that is, everything from retail stations to engineering and logistics,” he added.
He said the acquisition of stake in the company by Vitol and Helios would help the company to have easy access to local and international capital and also address the perennial supply challenges in the downstream sector.
According to him, the industry is today faced with the issues of lack of access to capital and persistent supply crisis.
“Our ability as players in this industry to access capital locally and internationally is very important. So, the first benefit of this deal is that we are better positioned to access foreign direct investment (FDI). As a matter of fact, this year, I don’t think there has been any downstream deal in this country, apart from our own. I don’t think anybody has brought dollars into this market. What people are doing is that they are running away with their dollars. That is why there is pressure on exchange rate. So, it is remarkable that Oando is able to attract real dollars brought into the Nigerian banks to support the downstream operator. As you know, most of the news you read about the downstream sector is usually negative. It is either supply issues or subsidy issues or forex issues,” he explained.
“It is good news that an industry that employs a lot of people; that pays a lot of taxes and generates billion of naira, is able to attract FDI into Nigeria in today’s climate,” he added.
Awobokun said with the entry of Vitol as a shareholder of the company, OVH Energy is well-positioned to address the international issues that have held the country to ransom, adding that there are only few trading companies in the world that have the size of Vitol.