Why ExxonMobil sold downstream arm to NIPCo Plc

Last week, it was announced that a leading indigenous downstream company, NIPCo Plc acquired over 60 per cent stake in Mobil Oil Nigeria (MON) Plc. While many Nigerians expressed satisfaction for the acquisition by a Nigerian firm, investigations by the Nigerian Tribune revealed the reason ExxonMobil entrusted such confidence in NIPCo Plc and sold its stake in its subsidiary to NIPCo Plc.

Following the track record NIPCo Plc over the years, the company has been looking for opportunity to expand its business interest especially in supply of Jet-A1 fuel otherwise called Aviation fuel. NIPCo Plc has also taken bold step to venture into bonding of lubricants and it recently embarked upon building a world class lubricant blending factory within its premises prior to the deal.

Sources at the indigenous firm said NIPCo Plc may have to suspend the project of lube blending business and focus on its new business interest in MON which has trusted brands in lube business.

In a chat with the Nigerian Tribune, the Managing Director, NIPCO Plc, Mr Venkataraman Venkatapathy, stated that MON will continue to run as a separate, distinct and independent company from NIPCo Plc. Each with its own CEO and will report to its Board of Directors.

“In our usual way of attaching premium to staff welfare, Nipco shall respect the terms of all collective agreements with employees and the unions that represent them including PENGASSAN and NUPENG. All employees are assured of job safety as there is no plan for staff redundancies.

“In furtherance of this transition, MON will continue to maintain the Mobil brand at its retail outlets as well as blending and selling Mobil brand of lubricants under branding licensee(s) from ExxonMobil. In essence, MON will continue as usual and therefore, the change should be smooth and seamless,” he said.

In addition to giving the employees much needed assurances on their job safety, he emphasized that the company’s goal is to increase presence and efficiency by expanding MON’s retail footprint to a minimum of 300 by December 2017 and make it a vibrant one.

He urged MON personnel to the new roadmaps for growth whilst simultaneously exploring opportunities to provide MON with additional products like LPG, which is one of the strength of NIPCo Plc.

Furthermore, he assured that Nipco’s successful philosophy and track record of supporting and empowering its staff and management team will continue at MON. “Staff welfare and comfort will be paramount and receive priority as we forge ahead,” he said.

He said Nipco wishes to express its profound gratitude and appreciation to ExxonMobil for selecting it as the preferred bidder for the acquisition of MON.

“We wish to give every assurance to ExxonMobil that having entrusted us with this invaluable asset (MON), we will ensure full brand compliance with ExxonMobil’s global standards as well as rigorously sustain and follow ExxonMobil’s code of conduct/ethos and operational excellence,” he said.

“Nipco considers this acquisition as an important synergy. It is part of our strategic moves to support Nipco’s continuous growth and expansion of its Nigerian retail footprints. We are confident of adding tremendous value to MON and likewise MON will add a huge value to Nipco,” Venkatapathy said.