Vitol and Helios snap up Nigerian fuels business

July 4, 2016

Vitol and Helios Investment Partners have completed the purchase of a majority stake in a Nigerian fuels business for $276m, deepening the involvement of the world’s largest oil trader in Africa’s top energy producer.

The 60 per cent stake in Oando Plc’s downstream and retail business, which will be renamed OVH Energy, gives the Vitol-Helios consortium 400 service stations in Africa’s most populous country, plus more than 600,000 barrels of storage and terminal capacity,writes David Sheppard.

Vitol and Helios have an existing partnership called Vivo Energy that sells and distributes Shell-branded fuels in 16 African countries.

The majority of proceeds from the sale will be used by Oando, one of the largest Nigerian energy groups, to recapitalise its fuel sales operations, the company said. With the 60 per cent stake, Vitol and Helios have acquired 51 per cent of the downstream company’s voting rights.

OVH energy will have approximately 12 per cent of the Nigerian fuels market, the company said.

Tope Lawani, co-founder and Managing Partner of Helios Investment Partners said: “We are confident that our expertise and regional presence will support the management team in capitalising on its strong market position and the compelling growth opportunities in Nigeria.”

Ian Taylor, President and CEO, Vitol said: “This investment is a further reflection of our confidence in the Nigerian economy, and will be independent of the services we provide to our long standing Nigerian customers.”

Opec-member Nigeria has seen its economy pressured by the halving in oil prices over the past two years. Militant attacks largely targeting oil producing facilities in the Niger Delta have hit the country’s output in recent months.

Despite having Africa’s largest oil production capacity its refining sector has struggled to produce enough fuel to meet the local population’s needs.

The country imported more than 150,000 barrels a day of petroleum products in 2014, according to the US Energy Information Administration, but still suffers from frequent fuel shortages. Source: FT