How Nigeria Is Benefitting From NNPCL’s Acquisition Of Oando Branded Retail Stations

The Nigerian National Petroleum Company Ltd in October 2022 acquired the entire assets of OVH Energy Marketing Company.

OVH’s expertise spans the provision of jetty services and the marketing and distribution of refined petroleum products for retail, commercial, and industrial purposes.

Its subsidiaries include OVH Energy Marketing (OVHEM) Limited, licensee of the Oando retail brand, and ASPM Limited, custodians of the Lagos Midstream Jetty, also known as West Africa’s first privately owned midstream jetty.

The company boasts of distributing over one billion litres of refined petroleum products annually, while ASPM Limited is focused on strengthening Nigeria’s downstream value chain through the Lagos jetty.

One of the benefits of the deal is that the 100 per cent acquisition of OVH Energy by NNPC Limited has made the National Oil Company become the company with the biggest downstream company in Africa.

This is because with the full acquisition, OVH retail stations trading under the Oando brand will now join the NNPC Retail Ltd.

The second benefit is that while merger and acquisition create opportunities for growth and sustainability, employees on both sides have maintained their employment with NRL, which is now the new owner of OVH.

Under the acquisition, OVH employees were engaged by NRL as NRL members of staff. This is because transiting OVH employees were accommodated under NRL terms and conditions of service since the NRL is a wholly owned subsidiary of NNPC Limited. Also, the corporate name of OVH Energy was changed to NRL, a subsidiary of NNPC Limited, bearing the NNPC brand.

The third benefit of the deal is that it has increase the assets of the NNPC Ltd, thereby making it to have reception jetty (ASPM) with 240,000MT monthly capacity, eight LPG Plants, three Lubes Blending Plants , three Aviation Depots, and 12 warehouses.

Similarly, as a result of the acquisition, an additional 380 filling stations were added to what the NNPC had, thereby boosting the aspiration of the National Oil Company to have 1,500 retail fuel stations

Oando was a shareholder of OVH and ceased to be a part of the OVH business in December 2019. OVH has a franchise agreement with Oando to use the Oando brand name, which is now being phased out and rebranding with NNPC.

As the acquisition creates the largest downstream entity in Nigeria with enormous opportunities, it therefore implies that competent employees will surely have more opportunities for exciting careers and growth

NRL business operations span across the nation, and under the current acquisition, NRL now has a wider presence while maintaining its corporate headquarters in Abuja.

As typical of such acquisition deal, employees are employed where they can deliver the best value to the company, and OVH employees have been accommodated under NRL terms and conditions of service.

As a member of the Major Oil Marketers Association MOMAN, the deal will not affect the membership of NRL. Rather, the acquisition will bring more fuel stations under the umbrella of NRL. This will help improve fuel availability and accessibility to Nigerians, thus supporting NNPC’s commitment to guarantee national energy security for Nigeria.

Another benefit of the acquisition is that it has leveraged the strength and capacity of NRL and OVH to create the fastest-growing commercial energy company that can guarantee energy security for Nigeria’s growing population

With mergers come business integration, which is a gradual process. Both NRL and the acquired OVH have their respective strengths, and through this, the resulting operating model has leveraged those assets to create a more efficient organization

As a growth-focused business, the NNPCL has pledged that it will always be on the lookout for opportunities that align with its business aspirations.

The acquisition of OVH Energy in 2022 by NNPCL has also boosted the profitability of NNPC Retail to N18.4bn in the first three months of 2023.

The NNPCL Group Chief Executive Officer, Mele Kyari, had said this while addressing the House of Representatives Ad-Hoc Committee on the OVH Acquisition

According to him, since the acquisition of OVH, the profit margin of NNPC Retail has jumped astronomically.

He said in 2021 that before the acquisition, NNPC Retail made N6.93bn profit.

Kyari said, “NNPC Limited is a creation of the federation with over 200 million Nigerians as shareholders. The Petroleum Industry Act (PIA) also grants us the mandate to guarantee national energy security. On this basis, it is duty-bound on us to grow our market share

“We believe that the only way we can grow our market share is by expanding our business. Since the acquisition of OVH, the profit margin of NNPC Retail has jumped.

“We are happy with the acquisition of OVH. For instance, in 2021, before the acquisition, NNPC Retail made N6.93bn profit. But in one quarter after the acquisition (1st quarter 2023), we made a profit of N18.4bn. This is all as a result of the acquisition

“In every merger and acquisition, there is a transition period. We are rising to those challenges brought about by the transition. We are also ensuring that none of our staff at NNPC Retail is victimized. Staff are placed where they are best fit towards optimum performance.”