Reps reject NNPCL’s OVH acquisition report, order fresh investigation

Reps reject NNPCL’s OVH acquisition report, order fresh investigation
Reps reject NNPCL’s OVH acquisition report, order fresh investigation

Africa-Press – Nigeria. The House of Representatives, on Wednesday, turned down the report of its Ad-hoc Committee that investigated the alleged irregularities and corruption in the acquisition of OVH Energy Marketing by the Nigerian National Petroleum Company Limited (NNPCL).

The Hassan Abubakar Nalaraba-led committee’s report was discarded after it was debated at plenary on Tuesday due to fresh evidence, which emerged that the exercise was not properly conducted.

The House was shocked to receive documents written by a foreigner, Huub Stokeman, who is the MD of NNPCL Retail and former MD of OVH, the company that was acquired by NNPCL, wherein he requested the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to renew the licence of the same company, even before the acquisition.

The discovery has thrown up a conflict of interest situation that has raised serious suspicion and requires lawmakers to find out how a company that was acquired two years ago has not merged completely while the MD of the acquired company is now the MD of the NNPCL Retail that acquired them.

Also, the House ordered that the entire acquisition transactions be thoroughly reviewed with details and terms of the acquisition agreement, the financials and valuation reports scrutinised to ensure that Nigeria was not shortchanged in any way.

Consequently, the House mandated its Standing Committee on Petroleum Resources (Downstream), chaired by Ikenga Imo Ugochinyere, to conduct a forensic investigation into the acquisition deal running into hundreds of billions of Naira and report back for immediate action.

It will be recalled that the House had in July last year asked the NNPCL to suspend the acquisition of OVH Energy Marketing after deliberating on a motion by Miriam Onuoha and other lawmakers on the “need to investigate the irregularities and alleged corruption in the Nigerian energy security provider, NNPC Retail Limited and the acquisition of OVH Energy Marketing”.

Onuoha had expressed concern that: “Before the acquisition, OVH Energy claimed to have about 380 company-owned stations, a jetty (ASPM) WITH240,000 MT, eight (8) LPG plants, three (3) lubricants blending plants, three (3) aviation and fuel depots and twelve (12) warehouses whereas they had owned only 72 stations as others were leased or owned by third parties, all 8 LPG plants were leased, 12 lubricant warehouses listed were leased.”

NNPCL had on October 1, 2022,

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 consequently constituted an Ad-hoc Committee with Nalaraba as chairman with the mandate to probe the alleged irregularities and corruption in the acquisition of OVH Energy Marketing.

While the Ad-hoc Committee was awaiting consideration of its report by the House, a group known as Nigeria Transparency Council (NTC) dragged the Mele Kyari-led NNPCL management and NNPCL retail group to the House Committee on Downstream over the alleged shoddy acquisition deal between the company, Nueoil and OVH Energy, which is alleged to have cost hundreds of billions of Naira due to alleged over bloated assets with the merger of the acquired company not yet formalised.

According to NTC, NNPCL GCEO, Mele Kyari, had told the Ad-hoc Committee that the acquisition of OVH Energy was properly done and it gave the NNPCL over 30 per cent control of the downstream sector with a profit of N18.4 billion in the first quarter of 2023, a position which has been disputed by industry players as not backed by any documentary evidence.

It was recently disclosed that the National oil company paid cash amounting to over $325.09 million (N140.559 billion) for the acquisition of Oando-branded retail stations and a reception jetty in Apapa, among other facilities.

Allegations are trailing the acquisition that some of the acquired assets do not belong fully to OVH or licensed.

In a petition submitted to the Chairman of the House Committee on Petroleum Resources Downstream, Ikenga Imo Ugochinyere, who represents Ideato Federal Constituency of Imo State, the group’s Secretary-General, Dr. Ayo Olubunmi, urged the lawmakers to convene a meeting of their committee to look into the acquisition agreement.

The group urged the House to probe the assets said to have been bought, “the promoters of the Nueoil and why Nueoil bought OVH within eight months of incorporation before NNPCL bought OVH from Nueoil within weeks with some officials of Nueoil working as alleged officials of NNPCL”.

The group also urged the lawmakers to look into the evidence of financial transactions plus the valuation reports and the circumstances that led to the emergence of the official of the acquired company as head of the state-owned oil company arm (NNPCL Retails).

They lamented lack of proper investigation in the previous probe and complained of non-observance of due process in the investigation procedure because the earlier panel didn’t investigate the beneficial owners of the Nueoil and the emergence of Mr Stoks as NNPCL Retail MD.

The House also noticed that there were many grey areas that needed to be cleared to determine if the NNPCL breached any known law in the investigation.

The House wants a determination of the value of the assets acquired in view of evidence that some of the assets acquired where either bloated or do not belong to the OVH company as some where alleged to be on lease.

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