NNPC Limited acquires OVH Energy
The Nigerian National Petroleum Corporation (NNPC) Limited has acquired Oando retail brand, OVH Energy Marketing. OVH Energy is the owner and operator of the Oando branded retail service stations. OVH will be merged with NNPC Retail Limited.
NNPC Limited and OVH Energy made the announcement on October 1. OVH Energy says that the strategic move aims to create the leading downstream energy company in Nigeria and West Africa. The company will be driven by operational efficiency, best-in-class management, and physical infrastructure while offering premium petroleum products and related services to customers,
Through the acquisition, NNPC Retail Limited will become the biggest downstream company in Africa in its pursuit to guarantee energy security for Nigeria’s growing population.
Speaking at the event, NNPC Group Managing Director, Mele Kyari said the acquisition provides more NNPC branded fuel stations, wider access for existing customers as well as an enriched supply chain and product availability across various 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,” he says.
The chief executive officer of OVH Energy, Huub Stokman said both entities will innovate their infrastructure to transform the downstream energy sector in Nigeria and West Africa.
He says; “This acquisition by NNPC Limited comes at a critical time in the Nigerian energy sector given the overhaul of the petroleum laws, with the recent enactment of the PIA, the continuing increased demand for petroleum products, and particularly the deliberate efforts to increase and improve the supply and consumption of natural gas in support of our energy transition goals.”
Acquisition metrics
During the event, the NNPC Board Chairman, Senator Margery Chuba-Okadigbo said that as a result of the acquisition, additional 380 filling stations would be added to what the NNPC had, adding that with this, the aspiration of the National Oil Company to have 1,500 retail fuel station would soon be achieved.
According to her, other assets include a reception jetty with 240,000 metric tons monthly capacity, 8 liquefied petroleum gas plants, 3 lube blending plants, 3 aviation depots, and 12 warehouses.
NNPC Limited currently operates over 500 outlets across the country, including its 12 floating mega stations, which cater to riverine areas.
The optics
Nigeria’s downstream sector is riddled with some challenges including low investments, policy implementation delays, petroleum products smuggling, lack of adequate infrastructure, and many more.
The acquisition of OVH Energy by NNPC Limited is a case of a private company acquiring another impactful private sector company. This is an example of reduced government participation in the downstream sector, a source at an NNPC Limited subsidiary told Nairametrics.
According to the source, it is a good thing that NNPC is no longer under the government and is now operating as a private sector entity, which will promote transparency while pushing for success in Nigeria’s downstream sector.
The source says; “OVH Energy has a track record of excellence in delivery in the sector and the acquisition will bring better performance into the sector, as both entities will be joining their assets to serve Nigerians better and increase capacity to meet growing energy demand.”
NNPC Limited was transformed into a limited liability company in July 2022.
On the other hand, an oil and gas analyst, who wants to remain anonymous, told Nairametrics, that there is no doubt that the acquisition will increase the capacity of NNPC Limited. However, the analyst does not think the downstream sector has recorded any success as a result of this acquisition. The analyst says he looks forward to a sector that has zero challenges around infrastructure.
