NNPC Group CEO Mele Kyari says the acquisition of OVH Energy Marketing Limited, the venture behind the Oando Retail brand in West African countries, was carried out in accordance with the CAMA Law which establishes the process of merger and capital acquisition.
My Kyari, appearing before the House of Representatives ad hoc committee investigating the acquisition, said NNPC Limited now operates as a private limited liability company and entered into a business relationship with OVH to capture market shares in the market of oil.
Acquisition of OVH by NNPC Limited
In 2022, NNPCL announced the outright acquisition of OVH Energy. Through this acquisition, OVH Energy would merge with NNPC Retail, a subsidiary of NNPC Limited.
The assets acquired from the company, which manages the Oando service stations, also include a receiving jetty with a capacity of 240,000 tonnes per month and eight liquefied petroleum gas plants, three lubricant blending plants, three aviation depots and 12 warehouses.
But in June, Newslodge’ investigation into the acquisition exposed the secret deals and complicated ownership structure that left management control of NNPC Retail in the hands of OVH Energy Marketing.
Furthermore, the report highlighted how Huub Stoksman, an expatriate and former CEO of OVH Energy, emerged as the new CEO of NNPC Retail, a development that further complicated the structure of NNPC Retail.
In July, the House, following the adoption of a motion moved by Miriam Onuoha (APC, Imo), ordered the NNPCL to suspend the acquisition of OVH pending an investigation by its committee.
Kyari was supposed to appear before the committee on Monday, but did not.
Response to the questions raised
Responding to the issue of opacity, Mr Kyari stated that the PIA provides the guidelines on the functioning of NNPC Limited and that the corporation also followed the process provided under the CAMA Act. He said he would make details of the document available to the committee.
Mr. Kyari said that for years, NNPC Limited has been making losses for the last 40 years, and there is a need to push the company to make profits and compete with other players in the industry. He stated that the acquisition of the assets is already generating profits.
“Five years ago, the NNPC was limited: the maximum we reached was in 2021, we got N6.5 billion. In the first quarter of 2023, after the acquisition, this acquisition means a profit of N18.4 billion in one quarter. It’s because we have expanded.
“We have a better brand and better capacity in market shares. This is the dramatic change we have had due to the acquisition. The petitioners earlier wrote to the EFCC to establish whether something was wrong or not. You can request them. “We didn’t do anything wrong.” he said.
Why we hire Oando management
Speaking on the appointment of Stoksman, an expatriate and former CEO of OVH Energy, as CEO of NNPC Retails, Kyari said NNPC Limited wanted Oando’s culture in the post-acquisition era.
He added that he pleaded with Mr Stoksman to keep the job because NNPC Limited needed him to achieve its goals.
He said such inclusion is necessary because NNPC Limited now seeks to operate as an international oil company.
“You created a national oil company with international affiliations, a commercial company that must do business with the world. Mr. President, our counterparts, as a matter of policy, would reserve 10 percent of their total population for expatriates. Not for nothing but because you can bring new cultures and new ways of doing things, new skills that you don’t have, new expats that you don’t have.
“There is no national oil company of our size that is a limited liability company that does not have expatriates. I begged the CEO to stay, I practically begged him to stay because he had the option to leave. It took me many days of commitment and we are already seeing the value,” he said.
Talking about the movement of staff of NNPC Limited after the merger, he said that the movement of staff is done based on capacity and results. He added that gone are the days of promotions based on seniority, instead staff will only take on responsibilities based on ability to deliver.
“People don’t want to move. This is the challenge of mergers and acquisitions around the world. When you do M&A, you have a function that needs to be merged. You have responsibilities that must be consolidated. Some responsibilities may disappear. We have given them an option, if you don’t want to move, you can quit.
“In every merger you have to allow the dominant culture to take over, this is very typical, it is a culture of service and performance. You acquired an asset because you know they are doing better than you. People who are used to the old system will say no because you are bringing a new system. We are doing everything we can to ensure that staff are not negatively impacted. There would be pain,” she said.
Kyari also assured lawmakers that there are no plans to relocate the headquarters of NNPC Limited to Lagos State. He explained that since 70 percent of the operation is done in Lagos, more personnel will be sent there.
This is not a witch hunt—Panel Chairman
The chairman of the committee, Abubakar Nalaraba, earlier in his speech said that the committee is only interested in getting to the root of the issues raised by Nigerians regarding the procurement.
“There are also other allegations including but not limited to vindictive placement of initial staff of NNPC Retail, appointment of an expatriate as CEO and relocation of NNPC retail headquarters from Abuja to Lagos.
“This hearing is not intended to persecute anyone, but rather to clarify the various claims and complaints presented to this committee and the House of Representatives,” he said.
Before adjourning the session, Nalaraba said the committee will visit the assets of the NNPC.