NNPC Retail, the downstream arm of the Nigerian National Petroleum Company Limited, has ceased to exist after a court-approved transfer of its ownership and assets to OVH Energy Marketing Limited, a company it claimed to have acquired.
The court ruling effectively dissolves NNPC Retail, the primary importer of petrol in Nigeria, and transfers its ownership and operations to OVH Energy Marketing Limited, which now assumes full control of the entity.
This development follows a contentious purchase, as reported by PREMIUM TIMES, where OVH Energy effectively took control of NNPC Retail’s management, prompting an NNPC insider to describe the deal as ‘the most ridiculous business acquisition in the world’.
In October 2022, NNPC announced that it had acquired OVH Energy Marketing, owner and operator of the Oando downstream assets.
Through this acquisition, NNPC Retail Limited will build on the existing success of OVH and operate model service outlets leveraging OVH’s extensive asset base and commercial capabilities, it said.
NNPCL bought OVH from Nueoil Energy Limited a month after Nueoil Energy acquired OVH in September 2022.
Two months ago, NNPC Retail, OVH, and Nueoil jointly filed a petition at the Federal High Court in Lagos, seeking eight orders, including the dissolution of NNPC Retail and Nueoil without being wound up and the transfer of their assets to OVH Energy Marketing Limited. Justice C.J. Aneke granted all eight orders, making the merger effective from 1 January 2024.
The court ruling was based on a petition filed on 24 June by the three companies, with the affidavit of suit No: FHC/L/CS/921/2024 deposed by Valentina Ine Kodjo-Soroh. The court’s decision was published in the official gazette of the Nigerian government and in PUNCH Newspaper on July 18.
The acquisition includes a range of assets from OVH Energy, operator of Oando filling stations, comprising a reception jetty with a monthly capacity of 240,000 metric tonnes, eight liquefied petroleum gas (LPG) plants, three lube blending plants, three aviation depots and 12 warehouses.
In June 2023, a PREMIUM TIMES investigation revealed secret deals and a complex ownership structure behind the acquisition, which resulted in OVH Energy Marketing gaining managerial control of NNPC Retail.
The report also uncovered discrepancies in OVH Energy’s claimed number of filling stations during merger talks.
Furthermore, it exposed how Huub Stokman, OVH Energy’s former CEO, became NNPC Retail’s new Managing Director, adding to the complexity.
The investigation additionally found that the acquisition had created a toxic work environment at NNPC Retail, with OVH Energy officials dominating the management.
Despite the court’s orders, workers at NNPC Retail expressed concerns about the takeover, with one staff member describing it as “criminal.” They claimed that while they were aware of the gazette, they had not been officially informed.
“Nothing has changed in the working conditions of NNPC Retail,” said one aggrieved staff member. Another questioned how a profit-making NNPC Retail before the acquisition was now subservient to OVH, stating, “We bought them because we were making profits and needed expansion, and they were struggling. Now they own us. How do you explain that?”
Meanwhile, the House of Representatives has launched an investigation into the controversial acquisition, with many lawmakers describing a report presented on the matter as “suspicious and shabby.” The investigation continues under the House Committee on Petroleum Resources (Downstream).
In February, a civic group, Nigeria Transparency Council (NTC), petitioned the House of Representatives Committee on Downstream Petroleum to investigate how the NNPCL paid the sum of N140 billion for the acquisition of OVH Energy Downstream Assets.
The group also demanded the immediate suspension of Mele Kyari-led NNPCL management over the controversial and alleged shoddy acquisition deal between the company, Nueoil and OVH Energy Downstream Assets.
The group in a statement said the acquisition of the OVH Energy Downstream Assets cost hundreds of billions of Naira caused by alleged over-bloated assets with the merger of the acquired company not yet formalised.
The group said, “The NNPC announced in October 2022 that it had acquired OVH Energy Marketing, owner and operator of the Oando downstream assets, but did not disclose the price at which it bought it and the company that sold it.
“The House of Representatives last year set up an Ad-hoc Committee to investigate the alleged fraudulent acquisition of OVH by the National oil coy.
“But Mele Kyari, Group Chief Executive Officer of the NNPCL, appearing before the committee of the House before its dissolution in September, 2023 for an investigative hearing on the allegation, said the acquisition of OVH Energy was properly done, adding that it gave the NNPC over 30 percent control of the downstream sector with a profit of N18.4 billion in the first quarter of 2023, a position which have been disputed by industry players as not backed by any documentary evidence.
“Recently, it was disclosed that the National oil coy paid cash amounting to over $325.09 million (N140.559 billion) for the acquisition of Oando-branded retail stations and a reception jetty in Apapa, among other facilities with allegation trailing the acquisition that some of the acquired assets are alleged not to have belonged fully to OVH or licensed.” (SaharaReporters)
