09 October 2017, Sweetcrude, Abuja — The Nigerian National Petroleum Corporation, NNPC, Monday, described as baseless and inappropriate, the allegations of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, against its Group Managing Director, Dr. Maikanti Baru.
In a response to the allegations by Kachikwu, Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, stated that from the outset, the law and the rules guiding the NNPC do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.
According to him, what is required is the processing and approval of contracts by the NNPC Tenders Board, the President in his executive capacity or as Minister of Petroleum, or the Federal Executive Council (FEC), as the case may be.
“There are, therefore, situations where all that is required is the approval of the NNPC Tenders Board while, in other cases, based on the threshold, the award must be submitted for presidential approval. Likewise, in some instances it is FEC approval that is required,” the NNPC maintained.
The NNPC further faulted the contractual figures brandished by Kachikwu, while it stated that for both the Crude Term Contract and the Direct Sale and Direct Purchase (DSDP) agreements, there were no specific values attached to each transaction to warrant the values of $10 billion and $5 billion respectively placed on them in the claim.
He said, “It is therefore inappropriate to attach arbitrary values to the shortlists with the aim of classifying the transactions as contracts above NNPC Tenders Board limit. They are merely the shortlisting of prospective off-takers of crude oil and suppliers of petroleum products under agreed terms.
“These transactions were not required to be presented as contracts to the Board of NNPC and, of course, the monetary value of any crude oil eventually lifted by any of the companies goes straight into the federation account and not to the company.
“Furthermore, contrary to the assertion of Dr. Kachikwu that he was never involved in the 2017/2018 contracting process for the Crude Oil Term Contracts, Dr. Kachikwu was in fact expressly consulted by the GMD and his recommendations were taken into account in following the laid down procedure. Thus, for him to turn around and claim that “…these major contracts were never reviewed or discussed with me…” is most unfortunate, to say the least.”
Ughamadu disclosed that in the past, the NNPC had cause to clarify severally from Bureau of Public Procurement (BPP) as to the composition of NNPC Tenders Board and the role of NNPC Board appointed by Government.
He said, “The following clarifications were made: The BPP expressly clarified that NNPC Tenders Board (NTB) was not the same as NNPC Board. The governing board (NNPC Board) is responsible for approval of work programmes, corporate plans and budgets, while the NTB is responsible for approval of day-to-day procurement implementation.
“BPP referred to the SGF circular for the composition of the NTB to compose of the Accounting Officer (GMD NNPC) as the Chairman, with Heads of Department (GED) as members with the Head of procurement (GGM SCM) serving as the Secretary of the NNPC Tenders Board.
“The above clarifications of the provisions of the procurement process show that approvals reside within the NTB and where thresholds are exceeded, the NNPC refers to FEC for approval. Therefore, the NNPC Board has no role in contracts approval process as advised by BPP.
“As can be seen, all these clarifications were sought and obtained prior to August 2015 and were implemented by Dr. Kachikwu as the GMD of NNPC. Dr. Kachikwu also constituted the first NNPC Tenders Board on 8th September 2015 and continued to chair it until his exit in June 2016.”
To this end, Ughamadu said, “From the foregoing, the allegations were baseless and due process has been followed in the various activities. Furthermore, it is established that apart from the Ajaokuta-Kaduna-Kano (AKK) pipeline project and NPDC production service contracts, all the other transactions mentioned were not procurement contracts.
“The NPDC production service contracts have undergone the due process, while the AKK contract that requires FEC approval has not reached the stage of contract award.”