I am not mandated to discuss contracts with you | Baru replies Kachikwu

The Group Managing Director of the Nigerian National Petroleum Corporation, Maikanti Baru on Monday responded to the allegations made against him by Minister of State for Petroleum Resources in a memo to President Muhammadu Buhari.

Background:

  • Kachikwu had written a memo to President Buhari, alleging that Baru was involved in a $25 billion contract scam.
  • He also accused him of insubordination and sidelining him in important decisions.

NNPC’s response:

General Manager, Group Public Affairs Division, Ndu Ughamadu, in a statement in Abuja on Monday said;

  • The NNPC said the response was a directive from President Muhammadu Buhari.
  • It said the law and the rules do not require a review or discussion with the Minister of State.

“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 the NNPC to consider and respond expeditiously to the allegations,” NNPC said.

The NNPC stated that it was “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, 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.”

He added, “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.

“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 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.”

One comment

  1. spectacular as heads are clashes over claim of superiority on board governance.

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