Issues around OVH acquisition and NNPC retail, by Femi Awoyemi
In the financial, business, and economic sectors, there is no equivalence with the way evidence is handled in the political space. In these sectors, records exist for a reason, and any party seeking to promote self-interested agendas must provide evidence rather than rely on innuendos.
While there may be concerns about a particular entity, as a member of the governance community, I recognize that replacing objectivity and accountability with misrepresentations is unhelpful. Therefore, I offer my perspective on the NNPC-OVH issue without favoring any party.
Public and analyst records available to our Economic and Market Intelligence (EMI) unit indicate that Oando PLC exited OVH three years before NNPC Retail decided to acquire it. For context, OVH stands for Oando, Vitol, and Helios.
A review of Oando’s financial statements shows that the company divested its downstream business (OVH) in three tranches: 60%, 35%, and 5%. At the time, Oando was raising funds for the ConocoPhillips transaction, which eventually led to a prolonged dispute with the Securities and Exchange Commission (SEC) involving a major investor, who was also a business associate of a former Vice President, seeking to exit their investment in the company. This issue has persisted for years, and investors are still dealing with the fallout.
Today, Oando achieved a significant milestone in its long-term upstream strategy. Proshare’s EMI unit reports that Oando completed its acquisition of 100% of the shareholding interest in the Nigerian Agip Oil Company (NAOC) from the Italian energy company Eni. While this news may not receive widespread attention, it is significant. Shareholders of Oando Plc have expressed dissatisfaction with the company for various reasons, including unmet promises that have forced the company to change its strategy. For more details, see the comments at proshare.co/articles/oando…
According to a separate report at proshare.co/articles/memo-…, Oando’s divestment from the downstream business was a key part of its strategic shift to focus on more profitable upstream ventures, moving away from lower-margin downstream and midstream businesses. Key divestment dates are as follows:
- Initial Divestment – 30th June 2016
- Final Divestment – 29th November 2019
It appears that when Oando completely exited in 2019, OVH continued to use the Oando brand under a Trademark License Agreement (TLA) due to the goodwill associated with the brand. This is why some filling stations still bear the Oando name. The TLA was terminated effective 24th March 2023, but NNPC has 18 months from that date to complete the rebranding process. This means that the use of the Oando name will legally cease by the end of September 2024.
According to Proshare’s records, OVH was sold to NNPC Retail before this rebranding window expired. It is important for the investing public to understand the business and political nuances involved. If this information has changed, it is news to us.
NNPC Limited should consider issuing a clarifying statement as a matter of public trust. There are times when ambiguity may be permissible, but this is not one of them.
Awoyemi is the Chief Executive of Proshare Limited
