Kachikwu-Baru Feud: Senate to Probe 40 Oil Firms

Unknown October 08, 2017 0

Over 40 oil firms are expected to be invited by the Senate adhoc committee set up to investigate the allegations in the feud between the Minister of State for Petroleum Resources, Ibe Kachikwu, and the Group Managing Director, Nigerian National Petroleum Corporation, Maikanti Baru.

 

Kachikwu in a leaked memo to President Muhammadu Buhari had alleged that against the rules, Baru awarded major contracts worth $25bn without reviewing or discussing them with him or the NNPC board.

 

“The legal and procedural requirements are that all contracts above $20m would need to be reviewed and approved by the board of NNPC. Mr. President, in over one year of Mr Baru’s tenure, no contract has been run through the board.

‘‘As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media,’’ Kachikwu wrote.

 

One of Punch correspondents gathered that the Senate, which had earlier stated that it would probe the allegations, decided to invite over 40 companies which received the following contracts:  Crude Term contracts — valued over $10bn; the Direct Sale of Crude Oil and Direct Purchase of Petroleum Product (DSDP contract) valued over $5bn; the Ajaokuta-Kaduna-Kano gas pipeline contract valued at $3bn; allocation of funding contracts of national oil companies valued over $3bn and NPDC production service contracts valued between $3bn and $4bn.

 

Two senators who did not want their names in print confirmed this to one of Punch correspondents. Associates of both men within the government appeared to be reluctant to speak on record because of Buharis’s intervention in the raging feud.

 

One of them who is a director in the NNPC, while speaking to SUNDAY PUNCH, alleged that Baru had been warned several times against sidelining the apex body of the corporation.

 

According to him, in one of such instances, Baru was accused of making appointments into the NNPC without the approval of the board.

 

The director said during the 124th session of the NNPC Board meeting, Baru was allegedly criticised for appointing the Managing Director of NNPC Retail without informing the board. Members of the board complained that they learnt of the appointment in the media.

 

He said, “Kachikwu, pleaded with the board that the appointment of the MD of NNPC Retail Limited without recourse to the board should be treated as part of a learning curve and stated that going forward, management should present to the board a number of candidates that should be considered for such appointments for board evaluation before making appointments.”

 

The director also claimed that Baru was criticised at a separate meeting for attempting to submit the budget of the NNPC directly to Buhari without the input of Kachikwu or the board. He also re-echoed the complaints in Kachikwu’s leaked memo that Baru had been approving contracts through the NNPC Tenders Board and taking documents directly to Buhari under the pretext that Buhari is the substantive minister of petroleum.

 

The NNPC director further told one of our correspondents that NNPC and Schlumberger in June signed a tripartite agreement for the development of the Anyala and Madu fields under oil mining leases OMLs 83 and 85, offshore Bayelsa State worth over $700m.

 

He said it was not until Schlumberger released a statement to the media that the board heard about the contract

 

According to him, following Baru’s alleged circumvention of the board in the award of contracts, the Finance and General Purpose Committee of the NNPC board and the NNPC management sought legal opinion from external experts.

 

“Since the National Council on Public Procurement had not been appointed by the President, the Bureau of Public Procurement’s manual regarding the composition of the NNPC Tenders Board is merely advisory and not law.”

“In essence, the NNPC board, as the apex authority, with its fiduciary relationship with the corporation and the onerous liability exposure that it has, is not prohibited from approving contracts by the Public Procurement Act,” he added.

 

Meanwhile, sources close to the NNPC GMD told SUNDAY PUNCH that the Act establishing the NNPC stipulates that the chairman of the corporation’s board is the Minister of Petroleum Resources and not the Minister of State for Petroleum Resources.

 

President Muhammadu Buhari is Nigeria’s Minister of Petroleum Resources while Kachikwu is the Minister of State for Petroleum Resources. However, Buhari had named Kachikwu the chairman of the NNPC board.

 

According to them, Baru did no wrong by reporting to the President on issues of the oil firm, as he was only obeying the NNPC Act.

 

Speaking on condition of anonymity, a source who is highly-placed in the corporation said, “The NNPC Act does not recognise a minister of state. The act is explicit that the petroleum minister is the chairman of the NNPC board.”

 

When asked if Buhari was not aware of the NNPC Act before announcing a chairman for the corporation’s board, the source replied, “These were some of the issues raised at the meetings the President is holding.

 

“The NNPC GMD reports to the corporation board chairman, who of course, is the President. He (Baru) goes to the chairman because that is what the Act says.”

 

Another source stated that the allegations that Baru did not follow laid down rules in awarding contracts were not true, as some of the contracts were awarded some four to five years ago by the Federal Executive Council.

 

The source added, “There is a lower tender’s board at the NNPC and there is another which is higher and is referred to as the NNPC Tenders Board. The Bureau of Public Procurement is aware of this. The NTB handles or awards contracts of up to $20m.

“Anything beyond that goes to the Federal Executive Council. This is what has been happening at the corporation in the last three to four years.

“The AKK pipeline contract, valued at about $3bn, for instance, has been there for the past five years. Baru did not award it, as well as some others listed in the allegations, rather he inherited it.

“That the NNPC has not come out to make any official comment does not mean that it does not know what to say. Some of these contracts were awarded years back. The corporation will come out to say something, but for now, silence is a strategy.”

 

When contacted for an official comment on the allegations levelled against the GMD,  the Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, told our correspondent that he is not a member of the NNPC board and was not in the right position to know or speak on matters discussed at the firm’s board meetings.

 

“With due respect, I am not a member of the NNPC board. The board has a secretary. I speak for the NNPC and cannot be better placed to speak for the board. If it is something that has to do with the NNPC directly, please contact me for official comments,” he said.

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