The Group Chief Executive Officer of the Nigeria National Petroleum Company Limited (NNPCL), Mele Kyari, had said that the acquisition of OVH Energy was done in accordance to the Petroleum Industry Act (PIA).
Kyari, who spoke on Friday at the resumed investigative hearing of the Ad-hoc Committee on the acquisition of OVH Energy by NNPCL said the organisation did nothing wrong in the acquisition as it was purely a business decision that has begun to yield results in less than one year after it was done.
The NNPC GMD added that the PIA also mandated the company to be the energy guarantor for the country, adding that it was not an option for the company to do otherwise.
He added: “It is part of the law that we should protect national interest in a way to guarantee energy security. It is very clear that there is a huge relationship between energy security and national security anywhere in the world. Countries go to war to ensure energy security.
“This company came into existence as a result of the passage of the Petroleum Industries Act which included the creation of a commercial oil company that will work for all.
“You also decide that the shareholders of this company will be the federation meaning that the overall 200 million Nigerians are shareholders in this company.
“It is on the basis of this and to discharge our responsibility as proscribed by the law, we do need to have capacity to have control over the down stream sector of the economy.”
Kyari explained that the NNPC Retail Limited started in the year 2000, adding that until the period of acquiring the OVH chain, they were not able to grow organically.
He said they only had 48 stations owned by NNPCL and a mirage of companies that are affiliates all over the country, some of which were not functional fuel stations.
He said they could not serve the purpose because there were dealers who could not pay for the cost of the products and they had locations where they could not guarantee either the quantity or quality of the products sold.
Kyari added: “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.
“The corporation has been a loss making corporation for many years. With the transformation that 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 is 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 buy out.
“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. But we did nothing wrong.”