Nigerian National Petroleum Co. has acquired OVH Energy Marketing, operator of the Oando fuels and lubricants business and one of the largest lubricant producers in Nigeria.
The deal, announced Oct. 1, comes three years after the refiner entered the finished lubricant market and months after a landmark restructuring aimed at making the business more competitive and profitable.
Based in Lagos, Oando was formerly an integrated oil company, but in 2016 the downstream business entered a joint venture with Vitol Group and Helios Investment Partners to form OVH Energy Marketing. OVH licensed use of the Oando brand for retailing of fuel, lubricants and other petroleum products.
NNPC is headquartered in Nigeria’s capital, Abuja, and is the only company licensed to explore for and produce fossil fuels in the country. It also operates refineries, pipelines and a chain of fuel stations and has long been viewed as an underperformer and involved in corruption and part of the reason the country has failed to capitalize on its rich petroleum resources.
In July the company became a private business, Nigerian National Petroleum Co. Ltd. The government still owns 100% of its shares, but it now operates independently.
NNPC and OVH did not disclose terms of the agreement, but NNPC officials called the acquisition part of a strategy to increase its retail reach.
“Our acquisition of OVH, brings more NNPC branded fuel stations under the NNPC Retail Ltd. umbrella, providing wider access to our customers, enriched supply chain and product availability across our different locations,” CEO Mallam Mele Kyari said. “Our goal as NNPC Ltd. is to become a catalyst for massive improvement within the downstream oil and gas industry.”
NNPC’s main focus appears to be on fuel stations. The company currently has a chain of more than 500 stations but aims to increase that to 1,500 in Nigeria and Togo. OVH has a chain of 380 Oando stations, and NNPC said they will be transitioned to its own brand.
OVH owns three lubricant blending plants with combined capacity to produce 130,000 metric tons per year of lubes, giving it one of the highest manufacturing bases in the Nigerian market.
NNPC has a fledgling finished lubes business, launched in November of 2019 with the introduction of its own branded products. For years it intermittently produced base oils at its refinery in Kaduna, but that operation has been dormant for years.