In First Major Deal, NNPCL Acquires Downstream Assets of OVH Energy, Emerges Company with Highest Retail Petrol Stations in Africa
*We are bringing 45 years of experience, says Kyari
Emmanuel Addeh, James Emejo in Abuja and Peter Uzoho in Lagos
In a landmark deal, the Nigerian National Petroleum Company Limited (NNPCL) has acquired OVH Energy Marketing (OVH) Limited, a major downstream player in the Nigerian oil and gas industry.
The Group Chief Executive Officer (GCEO) of NNPCL, Mallam Mele Kyari, announced the acquisition yesterday at an event held in Abuja.
OVH is the owner and operator of the Oando- branded retail service stations across the country.
With this acquisition, tagged by the NNPCL as ‘Acquisition for Growth’, OVH Energy’s Oando- branded retail service stations will be rebranded into the NNPC brand and merged with NNPC Retail Limited with full integration scheduled to take place by the end of 2023.
Kyari said the strategic move is aimed to create the leading downstream energy company in Nigeria and West Africa, driven by operational efficiency, best-in-class management, and physical infrastructure while offering premium petroleum products and related services to customers, in line with global standards.
Through this acquisition, he said the NNPC Retail Limited will build on the existing success of OVH Energy and operate model service outlets leveraging OVH’s extensive asset base and commercial capabilities.
Kyari stated that the NNPCL was bringing to the table, its 45 years of experience and strong capability to bear on the management of the facilities.
He maintained that securing the country against energy poverty would mean access to petroleum products in addition to managing the energy transition, which he said has become a reality.
“There’s no way you can do this except you have a robust system and processes, except you have a network that will work and you have an institution that can deliver value to its shareholders.
“We have struggled with this for many years, and we saw the opportunity to latch on to the competencies of the OVH Group. We have worked with them. They were our partners and our customers. So, we know their ability,” Kyari explained.
He added that the transaction also positions NNPC Retail Limited as the fastest growing commercial energy company in its pursuit to guarantee energy security for Nigeria’s growing population and significantly more growth opportunities for the business.
“Our acquisition of OVH, brings more NNPC- branded fuel stations under the NNPC Retail Limited umbrella, providing wider access for our customers, an enriched supply chain and product availability across our different locations.
“Our goal as NNPC Limited is to become a catalyst for massive improvement within the downstream oil and gas industry therefore, access to the extensive asset base of OVH is our audacious step towards attaining this goal.
“We are positive that this is the much-needed transformation required by the sector as it provides us with an integrated platform to attract the right investments which enable the growth of our operations,” Kyari stated.
The Chief Executive Officer, OVH Energy, Mr. Huub Stokman, said the acquisition by NNPCL came at a critical time in Nigeria’s energy sector given the overhaul of the petroleum laws with the recent enactment of the Petroleum Industry Act (PIA).
Stokman added that the deal took place at a time there was increased demand for petroleum products and particularly, the deliberate efforts to increase and improve the supply and consumption of natural gas in support of the company and Nigeria’s energy transition goals.
“We have always focused on a value-driven approach, prioritising the quality of products and services offered to our customers, at both retail and commercial levels. This acquisition enables the combined strengths of both entities, to innovate our offerings and infrastructure, necessary to transform the downstream energy sector in Nigeria and West Africa.
“It is an exciting time for us all, as we continue to focus on technological enhancement, our customers, staff, and other stakeholders,” he added.
In her remarks, the Chairman of the Board of Directors of the NNPCL, Mrs. Margery Okadigbo, noted that it was the right time to adopt the OVH as a ‘baby’ of the NNPCL, promising to ensure that the investment becomes the envy of the industry.
“In the end, everyone will be happier for it. We will continue to work with you,” she assured.
On his part, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed, described the deal as a major achievement.
While congratulating the NNPCL, he pledged that the NMDPRA would support the growth of the business and advised that sound corporate governance, as well as discipline, should remain the watchword in managing the assets.
OVH’s expertise spans the provision of jetty services and the marketing and distribution of refined petroleum products for retail, commercial and industrial purposes.
Its subsidiaries include OVH Energy Marketing (OVHEM) Limited, licensee of the Oando retail brand and ASPM Limited, custodians of the Lagos Midstream Jetty, also known as West Africa’s first privately owned midstream jetty.
It boasts of distributing over one billion litres of refined petroleum products annually while ASPM Limited is focused on strengthening Nigeria’s downstream value chain through the Lagos jetty.
In the short term, the acquisition would see the NNPCL receive a jetty (ASPM) with 240,000 metric tonnes monthly capacity, eight LPG plants, three lubes blending plants, three aviation depots and 12 warehouses.
The acquisition will also bring over 380 additional filling stations under NNPCL retail brand in Nigeria and Togo, on its journey to attaining 1,500 stations, making it the largest petroleum product retail network in Africa.