NNPC Suspends Takeover of OVH Energy Following Allegations of Opaque Transactions 

The declaration is contained in a letter dated 17 January, addressed to the chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and signed by the managing director of NNPC Retail Limited, Huub Stokman.

The letter is titled, ‘Notification of inability to complete OVH Energy Marketing Limited terminal, plants and depot takeover and intent to apply for operating licenses’.

The NNPC Ltd had in its latest financial statements said it paid cash amounting to $325.09 million (N140.559 billion) for the acquisition of Oando-branded retail stations and a reception jetty in Apapa, among other facilities.

However, in its letter, the NNPC Ltd said it has become evident that it cannot complete the merger deal.

The company said it intends to apply for operating licenses for the facilities under OVH Energy Marketing Limited.

“We appreciate the ongoing collaboration and support from the National Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in facilitating the acquisition of OVH Energy Marketing Limited.

“After careful review, it has become evident that we cannot complete the legal merger of NNPC Retail Limited and OVH Energy Energy Marketing Limited within the expected timeframe.

“Consequently, we regret to inform the NMDPRA that we cannot proceed with the takeover of OVH Energy Marketing Limited Terminals, Plants and Depots now,” the letter read in part.

It said to ensure compliance with regulatory requirements, it intends to apply for operating licenses for the facilities under OVH Energy Marketing Limited.

“Additionally, we understand the importance of fulfilling our obligations promptly,” it added.

“As such, we commit to paying the required takeover fees as part of our commitment to completing the takeover process when the legal merger has been successfully executed.

“We appreciate your understanding and assure the NMDPRA that we remain dedicated to complying with all regulatory processes and requirements. We will inform the NMDPRA of any developments and promptly submit the necessary documentation for the takeover process once the legal merger is completed.”

The OVH team have already taken over the management of NNPC Retail and have transferred virtually all the officials of the NNPC Retail headquarters in Abuja to the OVH office in Lagos. There are no indications that such decisions will be reversed despite the latest announcement.

Genesis

The NNPC Ltd had in October 2022, announced the acquisition of OVH Energy Marketing Limited’s downstream assets. By this acquisition, OVH Energy would be merged with NNPC Retail, a subsidiary of NNPC Ltd.

The assets acquired from the company, which operates Oando filling stations, also include a reception jetty with 240,000 metric tonnes monthly capacity and eight liquefied petroleum gas plants, three lube blending plants, three aviation depots, and 12 warehouses.

But in June 2023, PREMIUM TIMES’ investigation on the acquisition exposed the secret deals and the complicated ownership structure that left managerial control of NNPC Retail in the hands of OVH Energy Marketing.

The report also exposed how OVH Energy Marketing only had about 94 stations and how over 100 stations were leased.

In addition, the report highlighted how Mr Stokman, an expatriate and former Chief Executive Officer of OVH Energy, emerged as the new Managing Director of NNPC Retail, a development that further compounded the structure of NNPC Retail.

This newspaper also found out that the acquisition of OVH Energy had turned NNPC Retail into a toxic workspace, with officials of the former taking over the latter’s running.

In July 2023, the House of Representatives, following the adoption of a motion moved by Miriam Onuoha (APC, Imo), directed NNPC Ltd to suspend the acquisition pending an investigation by its committee.

Following Ms Onuoha’s presentation, the House resolved to set up an ad-hoc committee to investigate the allegations raised in the motion.

The House, however, commenced an investigation into the controversial deal in September 2023.

The ad-hoc committee requested the NNPC Ltd to furnish it with information about “registration documents/history from CAC for OVH, Nueoil, and NNPC Retail Limited (NRL), Board Resolution of NNPC Ltd on purchase of OVH, Audited Financial Statement and Management Accounts from 2015 to Date OVH, Nueoil, NRL and NNPC Ltd” and the “payroll from 2015 to date for NRL and OVH, Board Resolution of NRL/CHQ for movement of head office to Lagos and evidence of Tax Payments for NRL and OVH from 2015 to date.”

The committee also requested documents on all financial transactions associated with the acquisition, including payment records and fund transfers.

The Group Chief Executive Officer of NNPC Ltd, Mele Kyari, had said the acquisition of OVH Energy Marketing Limited, was done in compliance with the CAMA Act which provides the process for merger and acquisition of equity.

Last September, Mr Kyari, while appearing before the House of Representatives ad hoc committee investigating the acquisition, said the NNPC Ltd now operates like a private limited liability company and entered the commercial relationship with OVH to take over market shares in the downstream petroleum market shares.

Meanwhile, the NNPC Retail ‘concerned staff’, in their letter dated 25 September 2023, addressed to the chairman of the House Committee, and signed on their behalf by Mohammed Muazuo, noted that the request by the committee was not met.