By Tom Okpe
Group Chief Executive Officer of the Nigeria National Petroleum Company Limited, Mele Kyari has revealed that the NNPC Retails made a profit of N18.4 billion in the first quarter of 2023.
Kyari made this revelation on Friday at the House of Representatives, saying the company has over 900 fuel stations spread across the country, controlling about 30 percent of market in the downstream sector of the petroleum industry.
Speaking before the House Ad’hoc Committee, investigating acquisition of OVH Energy by NNPCL where Speaker of the House, Rep Tajudden Abbas assured of hitch free hearing, not witchunt of any agency of government, but promised that the Committee will work, to reposition, the country.
Kyari also said the organisation did nothing wrong in the acquisition as it was purely a business decision that has began to yield result, within a year.
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He said: “This company came into existence as a result of the Petroleum Industry Act, which included the creation of a Commercial Company Oil Company that will work for all.
“It was also, decided that the shareholders of the this company will be the federation; meaning that the overall 200 million Nigerians are shareholders in this company.
“It is part of the PIA law that we should protect national interest in way to guarantee energy security. It is very clear that there is huge relationship between energy security and national security anywhere in the world. Countries go to war to ensure energy security.
“We do need to have capacity, to have control over the downstream sector of the economy.
“We started NNPC Retail Limited in the year 2000 and until the period of acquiring the OVH chain, we were not able to grow organically. We only had 48 stations that we owned and a mirage of companies that are affiliates all over the country, some of which were not functional fuel stations, and could not serve the purpose because there were dealers who could not pay for the cost of the products.
“We had locations were we could not guarantee, either the quantity or quality of the products sold.
“We failed to grow organically for 23 years. The only way to bridge that gap is to do something strategic and this is very difficult in our industry. You have to acquire other people’s assets, to grow and achieve objective of the PIA and grow this company to the business we want it to be.
“The corporation has been a loss making institution for many years. With this transformation, thay came into the company before the PIA and after the PIA, this company is now a net profit company, declaring profit for its shareholders.
“We saw the opportunity to acquire this asset and add to our portfolio so that we can meet the requirements of the law. Right now, we are in control of 30 percent of the market in the downstream by this acquisition.
“No company will come to the public to announce that, but selling the company except by auction or acquisition.
“Acquisition of companies are always within internal processes of the company and every company has its own internal processes.
“In the case of OVH, they had two options. It is either they go to the exchange and sell 100 percent equity or do a management buyout.
“This is not new and this is what OVH opted for. We had no idea that they were doing this. They got to the point of sale. We saw the opportunity and waited for the deal to be closed and then latched on it and we are proud that we made this acquisition.
“We have nothing to hide, but this is a commercial relationship. We did nothing wrong. We know that there are acquisition that has taken place in this country, far less in scale and value than what we got.
“We have taken this acquisition through all the gamuts of processes and procedures established by the Companies and Allied Matters Act, the PIA and memorandum and article of association. So, there is nothing hidden.
“We have seen it in the media that it was a corrupt acquisition and this is far from the truth. It is painful, but we have agreed to serve the country and it will come at a cost.”
Speaking on the gains recorded from the acquisition, he said “five years backward, the NNPC Retails Limited highest profit came in 2021 of N6.593 billion, but in the first quarter of 2023, after, the acquisition of OVH, we got a profit of N18.4 billion.
“It is nothing because we have expanded; we have more footprint, better brand and greater capacity in terms of our market share.
“We were struggling to reach 15 to 20 percent in 23 years, but we are hitting 30 percent of market share in less than one year.
“This is the dramatic change that has happened to this compay as a result of this acquisition. We are proud of this acquisition,” he stated.
The GMD also noted that 70 percent of the NNPL operation is done around the Lagos area, adding that “if you move everyone involved in this operation from Lagos to Abuja, it will increase cost, geometrically and take you away from your operations.
“So, what we did was to merge our operations with OVH Limited, move the right people to turn right places and keep registered Head Offices’ in Abuja.
“The biggest market for this operation is in the Lagos area and we did not create this company to lose money.”
On employment or expartrates in the NNPC retails, he said; “You created a National Oil Company with international affiliation, a company that must do business with the world.
“There’s no company of our size that does not have expertrate employees. The MD they are talking about, I had to beg him to stay because he had the option of leaving. We are currently recruiting expatriate into areas where we don’t have the expertise.
“Many people will tell you that our country is a war zone and the only way you can dilute this is to show them that you are a peaceful country and there is no better way than to show that, expatriates agree to come and work with you.”
Also, House Leader, Prof Julius ihonvbare in his presentation said: “In the 10th Assembly, there is total commitment to join hands with the executive and other branches of government to reposition and rebuild this country.”
Chairman of the Committee, Hassan Nalaraba, in his submission, commended the NNPCL GCEO Mele Kyari for clearing the air on the petition.
Nalaraba noted that the committee will conduct an oversight visit to the OVH facilities to ascertain reality of on the ground.
He said much is expected from the GCEO, adding, he could be re-invited for further clarifications because the committee still have a week to submit its report to the House.
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