- Kyari appeared before the House of Representatives ad hoc committee investigating the acquisition
- Kyari says the NNPC Limited now operates like a private limited liability company
The Group Chief Executive Officer of NNPC, Mele Kyari, says the acquisition of OVH Energy Marketing Limited, the company behind the Oando Retail brand in West African countries, was done in compliance with the CAMA Act which provides the process for merger and acquisition of equity.
My Kyari, while appearing before the House of Representatives ad hoc committee investigating the acquisition, said the NNPC Limited 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.
Acquisition of OVH by NNPC Limited
In 2022, NNPCL announced the outright acquisition of OVH Energy. By this acquisition, OVH Energy would be merged with NNPC Retail, a subsidiary of NNPC Limited.
The assets acquired from the company, which operates 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 in June, an investigation on the acquisition exposed the secret deals and the complicated ownership structure that left managerial control of NNPC Retail in the hands of OVH Energy Marketing.
In addition, the report highlighted how Huub Stoksman, an expatriate and former chief executive officer of OVH Energy, emerged as the new managing director of NNPC Retail, a development that further compounded the structure of NNPC Retail.
In July, the House, following the adoption of a motion moved by Miriam Onuoha (APC, Imo), directed the NNPCL to suspend the OVH acquisition pending an investigation by its committee.
Mr Kyari was supposed to appear before the committee on Monday but failed to do so.
Responding to the issue of opacity, Mr Kyari stated that the PIA provides the guidelines on the operation of the NNPC Limited, and the corporation also followed the process provided in the CAMA Act. He said he would be making the details of the document available to the committee.
Mr Kyari said that for years, NNPC Limited has been making losses for the past 40 years, and there is a need to push the company towards making profits and competing with other players in the industry. He declared that the acquisition of the assets is already delivering profits.
“Five years backwards, the NNPC limited — the highest we did was in 2021, we did N6.5 billion. In the first quarter of 2023, after the acquisition, this acquisition means a profit of N18.4 billion profit in one quarter. It is because we have expanded.
“We have a better brand and better capacity in market shares. This is the dramatic change we have had because of the acquisition. The petitioners have earlier written to the EFCC to establish whether or not anything was wrong. You can request from them. We did nothing wrong.” he said.
Speaking on the appointment of Mr Stoksman, an expatriate and former chief executive officer of OVH Energy, as the managing director of NNPC Retails, Mr Kyari said the NNPC Limited wanted the culture in Oando in the post-acquisition era.
He added that he begged Mr Stoksman to retain the position 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 Chairman, our counterparts, by policy, they would keep 10 per cent of their total population to expatriates. Not for anything but because you can bring new cultures and new ways of doing things, new abilities you don’t have, new expatriates you don’t have.
“There is no national oil company of our size that is a private limited liability company that does not have expatriates. I begged the managing director to stay, practically begged him to stay because he had an option to leave. It took me many days of engagement and we are already seeing the value,” he said.
Speaking on the displacement of staff of NNPC Limited following the merger, he said the movement of staff is done based on capacity and deliverables. He added that the days of promotions based on seniority are over, instead, staff will only get responsibility based on capacity to deliver.
“People don’t want to move. This is the challenge of mergers and acquisitions all over the world. When you do merger and acquisition, you have a function that must merge. You have responsibilities that have to be consolidated. Some responsibilities may go away. We have given them an option, if you don’t want to move, you can resign.
“In every merger, you must allow the dominant culture to take over, this is very typical, this is a culture of service and performance. You acquired an asset because you know that they are doing better than you. The 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 don’t face negative impact. There would be pain,” he said.
Mr Kyari also assured the lawmakers that there are no plans to move the headquarters of the NNPC Limited to Lagos State. He explained that because 70 per cent of the operation is in Lagos, more staff will be posted there.
This is not witch-hunt—Panel chair
The Chairman of the Committee, Abubakar Nalaraba, earlier in his speech, said the committee is only interested in getting to the root of the issues raised by Nigerians regarding the acquisition.
“There are also other allegations including but not limited to vindictive placement of the initial staff of NNPC retail, the appointment of an expatriate as a managing director, and relocation of NNPC retail headquarters from Abuja to Lagos.
“This hearing is not intended to witch-hunt anybody but to have clarity on the various claims and complaints brought to the attention of this committee and the House of Representatives,” he said.
Before adjourning the session, Mr Nalaraba said the committee will visit the assets of the NNPC.