Vivo Energy Did Not Bend Or Break Any Rules

0
Vivo Energy
Vivo Energy

By Basiru ADAM

Vivo Energy says it followed due process in its majority acquisition of Shell Ghana?s assets, and that it obtained necessary authorisation from the National Petroleum Authority (NPA).

Christian Chammas, Group CEO of the company who was in the country on a three-day visit, told the B&FT that: ?When we took over from Shell, Vivo Energy Ghana Holdings in Holland applied to get our transaction registered and approved, and it was approved.

?We are here to abide by the law and I can guarantee you that we stuck to the law; we did not deviate and we got all the necessary authorisation from the NPA, and that is all I can say.

?Now, the interpretation of the law or no law is not my business. All I can tell you is that this company and its shareholders adhered to what the NPA said; we got the authorisation from the NPA, full-stop.?

The take-over on August 1, 2013 by Vivo Energy of Shell Ghana?s assets has created a lot of ripples in the petroleum downstream sector, with local oil marketing companies fearing they will be outmuscled and kicked out of the market.

One of the concerns raised against the deal was that as per directives by the National Petroleum Authority (NPA), Vivo Energy should have been 50%-owned by Ghanaians to encourage strong local participation in the business of oil marketing.

However, the shareholding in Vivo Energy Ghana is such that it has only 18% minority local shareholders while Vitol, Helios Investment Partners, and Shell respectively own 40%, 40% and 20% of the remaining 82%.

The NPA, which is the regulator of the downstream petroleum sector and with whom the buck stops, is yet to explain why it approved the deal without the stipulated 50% Ghanaian ownership.

The Association of Oil Marketing Companies of Ghana, in a letter dated 15th July, 2013 signed by its Coordinator Mr. Kwaku Agyemang-Duah, sought explanations from the NPA regarding the deal.

Their concern is that Vitol, one of the majority shareholders of Vivo, is already a downstream player; and through Vivo, it gains direct access to all Shell filling stations and customers in Ghana. As such, it could undercut its competitors through predatory pricing to eventually gain monopoly status and drive up prices.

When contacted, Yaro Kasambata, PRO of the NPA, said he could not make any official statement on the matter since the NPA is yet to have a substantive CEO after the reassignment of Alex Mould to the Petroleum Commission.

Mr. Chammas watered down the concerns, saying there is no way his company could become a monopoly in the industry even if it were to move from the third place it occupies now to the top.

?Even if we grow from number-three to number-two, we are going to grow from 15% to 18% of the market share; so what type of monopoly is that? The largest market share is 22%,? he said.

Vivo Energy, he said, cannot buy directly from Vitol Energy since the NPA directs that oil marketing companies, including Vivo, should buy from the seventeen Bulk Distribution Companies (BDCs) available locally.

?The government has set the rules through the NPA that BDCs are the people who supply us; that will not change. We are not here to change the rules, we are here to play by the rules and make money as an OMC [Oil Marketing Company].

?Once we have bought the product from the BDC we sell it, full-stop; and that is what Shell was doing before and that is what we intend to do as Vivo Energy — no change when it comes to that.

?Now, if we gain more market share because we are more aggressive than others, well, that is business. Yes, I want to grow. I want to gain more market share. It means that somebody is going to lose, but that?s too bad,? he said.

Send your news stories to [email protected] Follow News Ghana on Google News

LEAVE A REPLY

Please enter your comment!
Please enter your name here