Mr. Huub Stokman, CEO, OVH Energy Marketing Company
…To enhance collaboration, competitiveness and focus on efficiency, profitability with expansion
…Prior to the acquisition, NNPCL has not been making profit with tepidity in the retail market
-By Felix Douglas
The acquisition and merger of OVH with Nigerian National Petroleum Company Limited (NNPCL) has kept many wondering how a major downstream retail marketing company could be involved in such process.
Reasons for the acquisition and merger were explained at a panel session by the company’s stakeholders during the Oil Trading Logistics (OTL), Africa Downstream.
The Chief Executive Officer of OVH Energy Marketing, Huub Stokman, disclosed that the acquisition and merger is for business growth and development. Also, it is all about relationships with third party ensuring that all sides benefit from the process, “The overall interest of the merger is to create efficiency and progress to grow business making sure the customers are sensitive.”
Giving his brief presentation at the panel titled: “Emerging Trends in Storage and Distribution of Petroleum Across Africa and Beyond”, Stokman said, petrochemical facilities should be adjacent to refineries with existing network to possibly support supply. It is important to strengthen capacity with security. Efficiency point of view, it is expensive exercise to use technology without positive returns in investment especially in the private sector because investors want to see the impact.
However, refinery should get closer to the reach of marketers for effective product distribution.
He advocated for optimal structure to support network in terms of depot policy to provide security and investment in those depots to make them safe.
Since the market is still deregulated, inland depots should be secured to avoid supply distruption security.
“The question is, in terms of supply, what should be supplied to depots? Technology, how does it increase and improve the product? Technology doesn’t make sense, if it doesn’t move efficiency and how do we make sure we have success from the use of technology?”
Responding to a question with regards to the merger which some players in the downstream see as a threat that NNPCL Retail Outlet, seen as a big masquerade in the house could overwhelmed other small players. How will Nigerian consumers be well protected? What assurance is NNPCL giving Nigerians that the company will not use its scale or size to muscle existing players in the industry. How will it collaborate with other stakeholders for level playing field that will be beneficial for all?
Mr. Isiyaku Abdullahi, former Managing Director, Pipelines and Products Marketing Company (PPMC), who is presently the Group Treasurer of NNPCL, buttressed his points that the new partners (OVH) will bring life back to the company’s Retail Outlet. “We came in to ensure we set collaboration, competitiveness and focus on efficiency, profitability with expansion of the businesses by imbibing best practices.”
According to Abdullahi, there’s free entry and exit in all businesses. “What keeps you afloat is try to do and take advantage of the opportunities. For instance, OVH is coming from a private perspective to a governmental retail business. So we’re going to take some of their best practices, how did they do it as seamlessly efficiently from the private sector. The high level of bureaucracy that we have in that system is retained and the benefit is to our consumers.”
In other words, in the NNPCL retail business, there are lots of facilities and assets, “Frankly, we don’t make profit, and no much business from the retail market, but we have the resources, human and asset facilities.” Putting together, is to create an enabling environment that makes business more efficient and service delivery so that the customer will have options to take and add value.
He posited that taking a cue from governments across the world, such as Aramco, PETROBAS and other businesses from governments have posted huge profits to the country. This can be replicated by NNPCL. “We can’t use taxpayer money and then we don’t deliver value.” The company has access to adequate storage facilities with support from regulators, yet it finds it difficult on the downstream division. Ultimately, there is need to render services with profit.
NNPCL is not coming from a scary position to intimidate other players rather there is need to work in unison together and ensure the consumers which are Nigerians benefit from the collaboration.
The NNPCL helmsman submitted that since OVH is part of the Major Marketers Association of Nigeria (MOMAN), the company decided to get a member and understudy how it has been operating successfully. One good thing is that all the staff of OVH are retained in NNPCL Retail Outlet and no one is sacked. The company will be listed at the stock exchange to allow Nigerians participate, hence, there is need for proper management and accountability like other private entity on the downstream and across the globe.
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