Experts criticize Reps’ dissolution of Committee probing NNPCL’s controversial acquisition of OVH Energy.
Adebayo Obajemu
On February 28, 2024, the House of Representatives dissolved its ad hoc committee probing the controversial merger/ acquisitions of the OVH Energy upstream assets by the NNPCL , a deal that has led to a swell of criticisms for being opaque and lacking in transparency.
During the presentation before the House of Representatives, Hassan Nalabrabra( APC, Nassarawa), the chair of the ad hoc, Committee which looked into the merger said the Committee agreed with the processes and procedures of the merger saying the whole arrangements were transparent, but other members of the committee disagreed, which forced the House’s deputy Speaker, Benjamin Kalu to refer the matter to the House Committee on petroleum resources for fresh investigations.
Ever since the matter was reassigned for fresh investigations, many commentators and stakeholders have condemned the House for tardiness of a serious assignment.
Professor Aliyu Dankawa Abubakar, an energy expert lashed out at the House of Representatives for doing a sordid job. ” How can the House botch this important mission that borders on integrity, when it’s clear that the process of acquisition was not transparent? When are we going to get it right in this country?”
His views mirrors that of Dr.Olufemi Omoyele of the department of Entrepreneurship Osun State University, who said, ” there’s nothing in NNPCL’S activity that is transparent. This particular merger or is it acquisition we would call it is not transparent at all. One, they said they wanted merger, only to come up with story of not being able to go through the merger process after paying huge sums of money. Till date, we don’t know where it stands, I’m talking of the deal.”
Can you imagine the NNPCL’s statement on it , “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,” the oil form said.
Recall that in the heat of the controversy over the merger last year The Nigerian National Petroleum Company Limited (NNPC Ltd) said it was unable to complete the acquisition of OVH Energy Marketing Limited‘s downstream assets.
The declaration was 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 entitled, ‘Notification of inability to complete OVH Energy Marketing Limited terminal, plants and depot takeover and intent to apply for operating licenses’.
But before then, 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.
But curiously, shortly after the payment, the NNPC Ltd said it had become imperative that it could no longer complete the merger deal, but would rather 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.”
Meanwhile, before the deal was made public, sources told EnergyDay that OVH team had already taken over the Management of NNPC Retail and had transferred virtually all the officials of the NNPC Retail headquarters in Abuja to the OVH office in Lagos.
Backstage
It all started when the NNPC Ltd in October 2022, disclosed its acquisition of OVH Energy Marketing Limited’s downstream assets. The implications of this was that OVH Energy would be merged with NNPC Retail, a subsidiary of NNPC Ltd.
The assets got from the company, which is responsible for operation of 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 right from inception, experts have lashed out at NNPCL for nothing coming clean on the acquisition, since the deals were not made open, besides, the complicated ownership structure that left managerial control of NNPC Retail in the hands of OVH Energy Marketing was also another challenge.
As at then, OVH Energy Marketing only had about 94 stations.
Investigations then revealed that Mr Stokman, an expatriate and former Chief Executive Officer of OVH Energy, actually emerged as the new Managing Director of NNPC Retail, a development that further distorted the structure of NNPC Retail.
In view of this, it was believed 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.
Nigerians are awaiting the report of the House Committee on petroleum resources that is freshly saddled with the responsibility of investigating the opaque merger.
Efforts to get NNPCL’s reaction proved abortive as messages sent to its spokesperson was not acknowledged.
