The House of Representatives has urged the Nigeria National Petroleum Company Limited (NNPCL) to immediately suspend the acquisition of OVH Energy Marketing and the proposed relocation of the NNPC Retail Head Office from Abuja to Lagos pending the outcome of the investigation.
These resolutions followed the adoption of a motion titled “Need to Investigate the Irregularities and Alleged Corruption in the Nigerian Energy Security Provider, NNPC Retail Limited and the Acquisition of OVH Energy Marketing” sponsored by Hon. Miriam Onuoha Hon. Dabo Ismal Haruna Hon. Mark Chidi Obeto Hon. Abdullahi Aliyu Hon. Sadiq Ango Hon. Aliyu Gara and Hon. Clement Akan.
Investigative circumstances
The House also set up an Ad-hoc committee to investigate the circumstances surrounding the acquisition of OVH Energy by the NNPC Limited and report back within four weeks for further legislative action.
The House said the NNPC Retail is a subsidiary of NNPC Limited saddled with the responsibility of retailing fuel and allied products to the Nigerian populace, with about 700 company-owned stations and affiliates across all states.
The House also stated that it was aware that with the recent enactment of the Petroleum Industry Act, NNPC Limited was commercialised and expected to fund its operations.
It said to achieve this feat, NNPC Limited deployed a plan to grow the assets of NNPC Retail Limited (NRL) which included the acquisition of other downstream companies.
Enhance profitability
The House said it was also aware that on October 1, 2022, NNPC Limited announced the outright acquisition of OVH Energy (OVH) and Apapa SPM Limited (an affiliate of OVH Energy) to strengthen its downstream business portfolio, enhance profitability and guarantee national energy security.
The House was concerned that before the acquisition, OVH Energy claimed to have about 380 company-owned stations, a jetty (ASPM) with 240,000 MT, eight LPG plants, three Lubricants blending plants, three aviation and fuel depots and 12 warehouses whereas they had owned only 72 stations as others were leased or owned by third parties, all eight LPG plants were leased, 12 lubricant warehouses listed were leased.
The House was also concerned that the lopsided appointment of the Management Team and staff of NNPC Retail Limited made up of about 75% of OVH staff, the appointment of an expatriate, a former Managing Director of OVH ahead of many qualified Nigerians.
It said the immediate relocation of the NNPC Retail headquarters and NRL staff to Lagos where OVH is headquarter raises doubt as to whether NNPC Limited acquired OVH Energy or the reverse.
The House said it was informed that in every acquisition, if a firm buys more than 50 per cent of a target company’s shares, it effectively gains control of that company but in this case, it appears that the NNPC has taken over OVH Energy but in operational terms, it is OVH Energy that has taken over the affairs of NNPC Retail.
The House said it was also aware of the need to ensure transparency by addressing these irregularities and nefarious activities to take over the NNPC Retail by interested parties at a critical time in the Nigerian energy sector given the overhaul of the petroleum laws, the removal of fuel subsidy and in particular the deliberate efforts to curb corruption in the energy sector.
Lateefah Ibrahim
