NNPC $25bn Saga: How Kachikwu Lobbied, Got Contracts For 9 Firms From Baru Exposed - Welcome to Uju Ayalogu's Blog

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Thursday, 12 October 2017

NNPC $25bn Saga: How Kachikwu Lobbied, Got Contracts For 9 Firms From Baru Exposed

NNPC $25bn Saga: How Kachikwu Lobbied, Got Contracts For 9 Firms From Baru Exposed

Ibe Kachikwu

The war of integrity between Minister of State for Petroleum Resources Ibe Kachikwu and Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD) Dr. Maikanti Baru got more intense yesterday.

The oil giant faulted the Minister’s claim that he was not consulted on $10billion Crude Term Contracts.

The NNPC said Kachikwu made an input into the shortlisting of 40 off-takers for the Crude Term Contracts by recommending seven companies, which were engaged.

Also, the minister was said to have nominated two companies for the alleged Direct Sales, Direct Purchase (DSDP) transactions, which Kachikwu claimed were worth $5billion.

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The corporation said while the Minister was its GMD, he sent a memo to the Bureau of Public Procurement (BPP) seeking clarification on the status of the NNPC Tenders Board.

NNPC’s position is contained in a fact-sheet apparently prepared against the backdrop of the six posers raised by loyalists of Kachikwu for GMD Baru. The Nation published the posers exclusively yesterday.

Besides the posers, the minister had in an August 30 memo to President Muhammadu Buhari alleged that he was being sidelined by the GMD.

He said: “As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media. The question is, why is it that other parastatals which I supervise as Minister of State or Chair of their Boards are able to go through these contractual and mandatory governance processes and yet NNPC is exempt from these?”

Sources, who spoke with our correspondent, with a fact-sheet said the “posers amounted to mere academic exercise and sheer deceit by the minister”.

They claimed that the minister was consulted on most of the transactions he listed in his memo to the President, including Crude Oil Term transactions, Direct Sales, Direct Purchase (DSDP) contracts and Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline contract.

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The fact-sheet said: “For record purposes, Nigerians should be aware that Kachikwu single-handedly superintended and approved the off-takers of Nigerian Crude Oil and gas for 2016/ 2017. There were no issues then.

“As for the off-takers for 2017/2018, the minister was consulted by the GMD. Out of a list of 40 off-takers, Kachikwu recommended seven firms, which were accepted by NNPC management without any issue. He initially nominated three and later added four. His judgment was respected, accepted and approved by NNPC management alongside 33 others.

“The seven off-takers he recommended are as follows: North-West Petroleum; Setana Energy; Emo Oil; Litasco Supply and Trading Company;   Voyage Oil and Gas; Levene International  and Cespa Trading.

Since the Minister strongly recommended all these companies, we concurred with his recommendation which was based on a professional judgment. We also did not find any of the companies wanting and they met the criteria for crude lifting.

“On DSDP, the Minister also nominated two companies, Messrs Falcon Bay Energy Limited and Rain Oil Limited. The NNPC avoided all these details in its statement on Monday in order to protect the interest of these companies doing legitimate business. But Nigerians can appreciate that Kachikwu’s input was sought.

“Regarding AKK Pipeline contract, NNPC has explained that it is still in the works; it has not been awarded by the Federal Executive Council (FEC).

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“There was this $9.2billion Escravos Gas Pipeline Project which the GMD did not touch  in his memo to the President.

Apart from discussing and reviewing it with the Board of NNPC, the GMD wrote a June 29, 2017 memo to the Presidency and after official process and consultations with the Minister, it was approved. In fact, the Minister gave the final approval in a memo of August 22, 2017, although with some reservations.

“Concerning sections 130(2) and 148(1) of the 1999 Constitution, the Minister only alluded to the powers of the President. The NNPC GMD made it clear that he obtained the approval of the President on these transactions.

If the President, as the senior Minister of Petroleum Resources, has exercised his constitutional powers, what else is the Minister of State for Petroleum Resources after?

“It should be noted that NNPC and its GMD are only following the standards put in place by the Minister of State for Petroleum Resources on Crude Oil Term Contracts and other transactions. NNPC is following the same rules which the Minister put in place.

But the Minister is now criticising the same rules. The only thing that has changed is that Kachikwu is not the substantive GMD of NNPC again.’

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“Nigerians need to know that the Minister (while he was the GMD of NNPC) wrote a memo to the Bureau of Public Procurement (BPP) to seek clarifications on the financial limit of NNPC Tenders Board. And the BPP put the limit at $20million. This is what the NNPC management has been adhering to.”

When contacted, a top source in the Ministry of Petroleum Resources, who is in the position to know, said NNPC was lying.

The source said: “All of the above are lies. No official documentation backing this. This and possibly more to come are vain efforts to discredit Kachikwu and cover up the damning allegations he made.”

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