The Nigerian National Petroleum Corporation, NNPC, has responded to the allegations of inappropriate management practices levelled against its Group Managing Director, Dr. Maikanti Baru, by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.
The NNPC responded to Kachikwu’s allegations in a letter, signed by its Group General Manager, Group Public Affairs Division of the NNPC, Mr. Ndu Ughamadu, describing the allegations as baseless and accused the minister of exaggerating and concocting figures to give vent to his claims.
In the lengthy statement, the corporation maintained that due process was adhered to in all of its procurements and contract executions.
Providing details of its project executions so far, the corporation said so far, only $3 billion worth of contract expenditure had been signed off by it since Buhari took office, adding that out of the total sum, $1.2 billion of such financing loan was signed off by Kachikwu, with the balance done by Baru. The statement said:
“Following the publication of alleged lack of adherence to due process in the award of NNPC contracts, the president ordered the Group Managing Director and management of NNPC to consider and respond expeditiously to the allegations…
“Furthermore, it is established that apart from the Ajaokuta-Kaduna-Kano(AKK) pipeline project and Nigerian Petroleum Development Company, NPDC, production service contracts, all the other transactions mentioned were not procurement contracts.
“The NPDC production service contracts have undergone due process, while the AKK contract that requires FEC approval has not reached the stage of contract award.”
The corporation argued 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, insisting that what was required was 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 explained.
It further accused Kachikwu of concocting figures for the various contracts, stating 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 $10 billion and $5 billion 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.
“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,” the NNPC stated.