OVH Acquisition: NNPC says Tinubu not involved but fails to address key issuesIn its reaction to the NNPC-OVH controversy, the state-owned oil firm failed to address the crux of the controversial acquisition.
The Nigerian National Petroleum Company Limited (NNPC Ltd) on Thursday said President Bola Tinubu is not involved in the OVH Energy Marketing Limited acquisition deal. How ever, NNPC Ltd’s statement by its chief corporate communications officer, Olufemi Soneye, on Thursday failed to address the key issues raised about the OVH controversy.
On Tuesday, PREMIUM TIMES reported how a court ruling had effectively dissolved NNPC Retail and transferred its ownership to OVH Energy Marketing Limited. The downstream arm of the Nigerian National Petroleum Company Limited (NNPC Retail) officially no longer exists after it asked a court to transfer its ownership and properties to a firm it claimed to have bought.
On Tuesday, PREMIUM TIMES reported how a court ruling had effectively dissolved NNPC Retail and transferred its ownership to OVH Energy Marketing Limited. The downstream arm of the Nigerian National Petroleum Company Limited (NNPC Retail) officially no longer exists after it asked a court to transfer its ownership and properties to a firm it claimed to have bought.
PREMIUM TIMES reported NNPC Ltd’s controversial purchase of OVH Energy Marketing Limited and how the purchased company essentially took over the management of the buyer, which an NNPC insider described as “the most ridiculous business acquisition in the world.”
NNPC Ltd bought OVH from Nueoil Energy Limited a month after Nueoil Energy acquired OVH in September 2022.
However, in June, the three firms – NNPC Retail, OVH and Nueoil – jointly filed a petition at the Federal High Court in Lagos. In it, they asked the court to grant eight orders, including an order that NNPC Retail “be dissolved without being wound up” and that “the resultant company from the scheme shall be” OVH.
The petitioners further asked that all tax attributes, unutilised capital allowances, tax losses, withholding tax credits and other refunds available, but excluding the Nueoil Energy shares in the OVH Energy Marketing Limited, liabilities and business undertakings, including real property and intellectual property rights of the NNPC Retail and Nueoil Energy Limited be transferred to the OVH Energy Marketing Limited subject to the terms and conditions set out in the scheme without any further act or deed.
The court granted all eight orders, ordering that the merger be effective from 1 January. The court also mandated that all necessary incidental, consequential, and supplemental orders be made to ensure the full and effective implementation of the merger.
On Wednesday, in his reaction to PREMIUM TIMES report, the candidate of the Peoples Democratic Party (PDP) in the last election and former vice president of Nigeria, Atiku Abubakar, expressed astonishment at the operations of the NNPC Ltd and how the government-owned oil company had put its retail arm under the control of OVH, a company he claims is owned by Oando, led by Wale Tinubu, a relative of the president.
Atiku regretted that his intention to privatise the NNPC and increase its transparency has been overshadowed by what he describes as the “criminal hijack of the NNPC by corporate cabals around the current president,” according to the statement signed by his Media Adviser, Paul Ibe, said.
Following this controversial deal, Atiku said, Mele Kyari, the NNPC boss, was controversially retained as NNPC group managing director “despite his incompetence.”
Atiku said Nigeria paid Wale Tinubu a significant sum to facilitate the Tinubu family’s acquisition of the national oil company, noting that this represents a clear case of illogical business transactions and abuse of office by Mr Tinubu, who has prevented NNPC from becoming a public liability company as stipulated by the Petroleum Industry Act (PIA).
NNPC Reacts
However, the NNPC, in its response to Atiku on Thursday, said at the time it acquired OVH in 2022, Oando (in which Wale Tinubu has equity interest) had fully divested its equity in OVH to the two other partners, Vitol and Helios.
The NNPC explained that Oando began its divestment in 2016, with Vitol and Helios coming in as equity partners, leading to the change of name from Oando to OVH. In 2019, according to NNPC Ltd, Oando fully divested its equity interest in OVH resulting in Vitol and Helios holding 50 per cent equity interests respectively.
PREMIUM TIMES reported the divestment by Vitol and Helios from OVH which they sold to Nueoil in 2022. NNPC then bought OVH from Nueoil. The national oil company said while the merger is still ongoing, NNPC decided to rename the new company as NNPC Retails Ltd.
“Upon acquisition of OVH by NNPC Ltd, both NNPC Retail Ltd and OVH effectively became subsidiaries of NNPC Ltd. However, based on professional advice and sound commercial considerations, NNPC Ltd opted to merge NNPC Retail Limited into OVH, and thereafter retain NNPC Retail Limited as the company name post-merger.
“The first step of merging NNPC Retail Ltd into OVH has been completed and the post-merger renaming as NNPC Retail Ltd is ongoing. Contrary to the false alarm raised, neither Wale Tinubu nor the President has any interest in the OVH acquisition,” the statement said.
The NNPC said it is a commercially focused and profit-driven company managed by professionals who are committed to adding value to the nation, noting that investment decisions by its management are strictly determined on the basis of commercial viability and national interest.
“As a businessman, the former Vice President should know that effectiveness in business leadership is best measured by balance sheets and bottom lines rather than pedestrian considerations.
“The management of NNPC Ltd, under the leadership of Mele Kyari, has done very well in growing the company’s fortunes as shown in the 2023 Audited Financial Statement (AFS), where it reported N3.3 trillion as profit after tax. NNPC Ltd as a commercial entity is devoid of political interest and shall continue to conduct its business full of commitment to national interest and value creation for the benefit of all stakeholders,” Mr Soneye said.NNPC Ltd said it would resist any attempt to draw its board and management into partisan politics.
Issues Not Yet Addressed
However, a PREMIUM TIMES review of the NNPC response shows that the state-owned oil firm failed to address the crux of PREMIUM TIMES stories.
Firstly, the company’s statement indicated that it has failed to comply with the court order that it requested. It requested that NNPC Retail “be dissolved without being wound up” and that “the resultant company from the scheme shall be” OVH. If NNPC Ltd now claims it created a new entity separate from what the court granted, this shows that the company is not complying with the court order that it requested and the court granted it.
Also, when NNPC announced the acquisition of OVH from Nueoil, it did not announce that it was a partial acquisition deal. But the court order gives exemption of the “Nueoil Energy shares in the OVH Energy Marketing Limited.” NNPC failed to tell Nigerians the condition under which Nueoil is still co-owning OVH when NNPC had said it acquired OVH? What percentage of OVH did NNPC acquire from Nueoil?
0, if the NNPC acquired OVH as it claimed to have done, how come the management of NNPC Retail is now in the hands of OVH as reflected in the fact that the managing director of OVH is now the managing director of NNPC Retail? In addition to this, the headquarters of NNPC Retail has since been moved from Abuja to the OVH headquarters in Lagos.
These are some of the key missing details the national oil company failed to address.
Background of The Issue:
NNPC Ltd. announced in October 2022 the acquisition of OVH Energy Marketing Limited’s downstream assets. This acquisition would merge OVH Energy 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 that OVH Energy Marketing may not have owned as many filling stations as it claimed during the merger talks.
In addition, the report highlighted how Huub 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. “Did we acquire them, or did they acquire us? How come they are now the ones in the management,” one NNPC Retail staff told this newspaper.
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. Consequently, the House set up an ad-hoc committee with Hassan Nalabraba (APC, Nasarawa) as the chairman and 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.
In September 2023, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, while appearing before the committee investigating the acquisition, said 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. He said NNPC Ltd did nothing wrong in the acquisition.
Meanwhile, some NNPC Retail ‘concerned staff’, in a 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.
In October 2023, Mr Nalabraba presented a report on the investigation. In February, the House of Representatives dissolved the committee investigating the controversial acquisition after the panel presented a report many lawmakers described as “suspicious and shabby.” The task was subsequently transferred to the House Committee on Petroleum Resources (Downstream) for a fresh investigation.
In January, NNPC Ltd announced that it was unable to complete the OVH acquisition. It said it intends to apply for operating licenses for the facilities under OVH Energy Marketing Limited.
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