In a historic transaction, the Nigerian National Petroleum Company Limited (NNPCL) recently acquired OVH Energy Marketing (OVH) Limited, a significant downstream player in the Nigerian oil and gas sector.

With this acquisition, which the NNPCL is referring to as “Acquisition for Growth,” OVH Energy’s Oando-branded retail service stations will be rebranded into the NNPC brand and merged with NNPC Retail Limited, with full integration anticipated by the end of 2023.

Soon, the acquisition would give the NNPCL access to an ASPM jetty (with a capacity of 240,000 metric tonnes per month), eight LPG facilities, three lube blending plants, three aircraft depots, and twelve warehouses. On its way to reaching 1,500 stations, which would make it the largest petroleum product retail network in Africa, it would also install approximately 380 new filling stations in Nigeria and Togo under the NNPCL retail brand.

The GMD of NNPCL, Mele Kolo Kyari, made the announcement. Using operational effectiveness, best-in-class management, and physical infrastructure as a foundation, he claimed that the strategic move aims to build the leading downstream energy company in Nigeria and West Africa while also providing customers with premium petroleum products and related services that are in line with international standards.

Through this acquisition, he claimed, NNPCL will be able to expand on OVH Energy’s current performance and operate model service outlets by utilising its significant asset base and business competencies. He insisted that managing the energy transition—which he said has already occurred—as well as safeguarding the nation from energy poverty would be necessary.

Excerpts from his remarks:

“There’s no way you can do this except you have a robust system and processes, except you have a network that will work and you have an institution that can deliver value to its shareholders.”

“We have struggled with this for many years, and we saw the opportunity to latch on to the competencies of the OVH Group. We have worked with them. They were our partners and our customers. So, we know their ability.”

“Our acquisition of OVH, brings more NNPC- branded fuel stations under the NNPC Retail Limited umbrella, providing wider access for our customers, an enriched supply chain and product availability across our different 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.”

“We are positive that this is the much-needed transformation required by the sector as it provides us with an integrated platform to attract the right investments which enable the growth of our operations.”

The Chief Executive Officer of OVH Energy, Mr Huub Stokman, attended the occasion as well. He said that given the recent revision of the petroleum regulations with the passage of the Petroleum Industry Act, the acquisition by NNPCL occurred at a crucial juncture in Nigeria’s oil sector (PIA). The agreement was made at a time when demand for petroleum products was rising, particularly as concerted efforts were made to improve natural gas supply and consumption to support the company’s and Nigeria’s energy transformation ambitions.

He said: “We have always focused on a value-driven approach, prioritising the quality of products and services offered to our customers, at both retail and commercial levels. This acquisition enables the combined strengths of both entities, to innovate our offerings and infrastructure, necessary to transform the downstream energy sector in Nigeria and West Africa.”

“It is an exciting time for us all, as we continue to focus on technological enhancement, our customers, staff, and other stakeholders.”

The NNPCL’s Chairman of the Board of Directors, Mrs. Margery Okadigbo, stated in her remarks that it was the appropriate time to adopt OVH as a “baby” and pledged to make sure the investment became the envy of the sector. “In the end, everyone will be happier for it. We will continue to work with you,” she added.

The contract was hailed as a significant accomplishment by Mr. Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). While praising the NNPCL, he promised that the NMDPRA would assist its expansion and suggested that discipline and good corporate governance should continue to be the watchwords in asset management.

Jetty services and the marketing and distribution of refined petroleum products for retail, commercial, and industrial uses are two areas of specialization for OVH. Its subsidiaries include ASPM Limited, the guardians of the Lagos Midstream Jetty, also known as West Africa’s first privately held midstream jetty, and OVH Energy Marketing (OVHEM) Limited, the licensee of the Oando retail brand.