By Bliss Okperan
The Nigerian National Petroleum Company (NNPC) Limited has disclosed that since it acquired the downstream business of Oando Plc in October 2022, its retail business has witnessed a surge in profitability.
The chief executive of the NNPC, Mr Mele Kyari, disclosed this while addressing the ad hoc committee of the House of Representatives on the acquisition of OVH.
At the gathering in Abuja on Friday, he informed the lawmakers that in the first quarter of 2023, NNPC Retail posted a profit of N18.4 billion compared with the N6.93 billion achieved in 2021.
The acquisition of OVH has generated dust, prompting the lower chamber of the National Assembly to ask questions from the NNPC over the deal.
But Mr Kyari has described the OVH acquisition as the best thing to happen to the state-owned oil agency, noting that it has helped the profitability of the business.
“We are happy with the acquisition of OVH. For instance, in 2021, before the acquisition, NNPC Retail made N6.93 billion profit. But in one quarter after the acquisition (Q1 of 2023), we made a profit of N18.4 billion. This is all as a result of the acquisition,” Mr Kyari told the parliamentarians.
He also said, “NNPCL 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 increase our market share.”
NNPCL had in October 2022, acquired the Oando retail brand, OVH Energy Marketing, which added 380 filling stations to what the state oil company had, which amounted to almost 1,500 retail stations at the time.
While reacting to the issues raised over the transaction, he said, “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.”
“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.”
Last week, Business Post reported that the green chamber of the parliament was investigating the acquisition of OVH Energy.
