10 October 2017, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation (NNPC) has sought to clarify issues regarding allegations of insubordination and lack of due process in the award of $26 billion contracts by the Group Managing Director, Dr. Maikanti Baru, brought by the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu.
The Corporation in a statement signed by its Group General Manager, Public Affairs Division, Mr. Ndu Ughamadu, noted that the “law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.”
Dr. Kachikwu in a memo written in August this year to President Muhammadu Buhari and leaked to the public last week accused Baru of approving contracts worth $25b (over N9 trillion) without the knowledge and approval of his office.
The Minister also accused the NNPC GMD of insubordination and alleged that his efforts to meet with the Mr. President since he returned from London for medical attention early August have failed.
According to the statement, “Following the publication of alleged lack of adherence to due process in the award of NNPC contracts, the President ordered the Group Managing Director (GMD) and Management of the Nigerian National Petroleum Corporation (NNPC) to consider and respond expeditiously to the allegations.
“The substance of the allegations made by the Minister of State for Petroleum Resources, in a letter to the President dated 30th of August 2017, is that a number of ‘major contracts were never reviewed or discussed with me (sic) the NNPC Board.’
It added that, “It is important to note from the outset that the law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.
“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.”
According to the NNPC, what was 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.
The NNPC added that, “It should be noted that for both the Crude Term Contract and the Direct Sale and Direct Purchase (DSDP) agreements, there are no specific values attached to each transaction to warrant the values of $10billion and $5billion respectively placed on them in the claim of Dr. Kachikwu.
“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,” the Corporation stressed.
It added that “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 through 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.”
It would be recalled that both Kachikwu and Baru visited the Presidential Villa last Friday. While Kachikwu had over an hour closed door meeting with Mr. President, Baru met with the Vice President, Prof. Yemi Osinbajo.