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Baru Kachikwu's allegations are 'baseless', says NNPC boss

The NNPC has said it doesn't have to discuss the award of contracts with the minister.

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Dr Maikanti Baru and Dr Ibe Kachikwu play

Dr Maikanti Baru and Dr Ibe Kachikwu


Group Managing Director of the Nigeria National Petroleum Corporation (NNPC), Dr. Maikanti Baru, has responded to recent allegations made against him by Minister of State for Petroleum, Ibe Kachikwu, calling them 'baseless'.

This was communicated in a press release signed by the NNPC's Group General Manager, Group Public Affairs Division, Ndu Ughamadu, on Monday, October 9, 2017, under the directive of President Muhammadu Buhari.

The statement specifically addressed allegations that bordered on major contracts that were issued by Baru without a discussion with or review by the NNPC Board which Kachikwu belongs to.

The statement disclosed that contrary to Kachikwu's claims, contracts are not necessarily supposed to be reviewed by the NNPC board, but by the NNPC Tenders Board, the president in his capacity as the Minister of Petroleum, or the Federal Executive Council (FEC).

The statement read, "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 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.

"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.

"From the foregoing, the allegations were baseless and due process has been followed in the various activities."

In the press statement, Ughamadu also laid out the processes involved in reviewing the award of a contract by the NNPC, as well as list the procedures involved in the award of contracts specifically mentioned by Baru.

ALSO READ: Why NNPC boss, Baru ignored Kachikwu

In a letter Kachikwu wrote to President Buhari that was leaked to the media last week, he said he considered it important to call the attention of the president to his concerns about Baru's arbitrary conducts as head of the NNPC.

Kachikwu was at the Presidential Villa on Friday, October 6, to have a private meeting with the president to discuss the contents of the letter.

On Wednesday, October 4, the Senate set up an ad-hoc committee chaired by former Sokoto state governor, Aliyu Wammako, to investigate Dr. Baru in light of the allegations.

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