Femi Awoyemi: Issues around OVH acquisition, NNPC retail

There is no equivalence with evidence in the financial, business, and economic space, as it is done in the political space. Records exist for a reason in the former, and players seeking to push self-interested agendas must come with evidence and not innuendos in this space.

Despite misgivings about an entity, I, as a member of the governance community, understand that it is unhelpful if we allow misrepresentations to replace objectivity and accountability. On this note, I offer my thoughts on the NNPC-OVH issue without holding a fort for any party.

Public and analyst records available to our economic and market intelligence (EMI) unit affirm that @Oando_PLC was out of OVH three (3) years before @nnpclimited RETAIL chose to buy it out (btw, OVH stands for Oando, Vitol, and Helios).

A review of Oando’s financial statements shows that it divested its downstream business (OVH) in three tranches: 60%, 35%, and 5%. At that time, it was seeking to raise funds to invest in the ConocoPhillips transaction, for which it later got entangled with the SEC, where a key investor (who also happens to be a business associate of a former Vice President) sought to exit its investment in the company. This dragged on for years, and investors are still making their peace with it.

Interestingly, Oando achieved a significant milestone today in its long-term upstream strategy.

Proshare’s Economic and Market Intelligence Unit (EMI) represents that Oando completed its acquisition of 100% of the shareholding interest in the Nigerian Agip Oil Company (NAOC) from the Italian energy company Eni. That may go unheralded for many reasons, but the news is making the rounds. Shareholders of Oando Plc are genuinely unhappy with the company for many reasons, none the least the promise sold to them, which did not materialize and for which the company has to engage on a different premise.

In a separate report, it was stated that Oando’s divestment from the downstream business was a key part of its strategic representation to the market to move out of the lower-margin downstream and midstream businesses to focus on the more lucrative Upstream ventures.

1. OVH – Initial Divestment – 30th June 2016; and

2. Final Divestment – 29th November 2019

It would appear that either by design or default, when Oando exited entirely in 2019, OVH continued to use the Oando brand under a Trademark Licence Agreement (TLA) because of the goodwill associated with the brand name.

This is why the filling stations continued to bear the name Oando (some still do till today). We understand that the TLA was terminated effective 24 March 2023, but NNPC has 18 months to rebrand fully as part of the TLA.

This means that the use of the name would legally cease by the end of September 2024.

From Proshare’s records, OVH sold to NNPC retail before the expiration of this window, and the investing and general public should appreciate the business/political nuance at play. If this has changed, it is news to us.

The @nnpclimited should consider issuing a clarifying statement as a matter of sovereign integrity. There are good times to hide behind obscurity, but this is not one of them.

-Awoyemi is Chief Executive of Proshare Limited

Femi Awoyemi: Issues around OVH acquisition, NNPC retail