MINISTER of State for Petroleum Resources, Dr. Ibe Kachikwu rocked the boat last week when his memo to President Muhammadu Buhari got leaked to the press. Kachikwu, in the leaked memo, accused the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr Makanti Baru of alleged acts of insubordination and humiliation as well non-adherence to due process.
In the letter entitled ‘Re: Matters of insubordination and lack of adherence to due process by the GMD NNPC – Dr. Baru,’ written on August 30, Kachikwu said the NNPC boss had repeatedly sidelined and disrespected the board of the national oil firm, which is chaired by the minister of state.
The minister outlined the various alleged misdemeanours of the NNPC boss, urging Buhari to intervene by calling on Baru to respect due process.
In August 2015, Buhari appointed Kachikwu as the NNPC GMD, but replaced him with Baru in July 2016 and made the minister the chairman of the corporation’s board.
In the letter, Kachikwu said: “Mr. President, yesterday (August 29, 2017) like many other Nigerians, l resumed work and was confronted with many publications of massive changes within the NNPC.
“Like the previous reorganisations and ‘repostings’ done since Dr. Baru resumed as GMD, I was never given the opportunity before the announcements to discuss these appointments. This is so despite being the Minister of State, Petroleum, and chairman, NNPC Board.
“The board of NNPC, which you appointed and which has met every month since its inauguration, and which, by the NNPC, is meant to review these planned appointments and postings, was never briefed. Members of the board learnt of these appointments from the pages of social media and the press release of NNPC.”
Kachikwu told Buhari that it was in the spirit of service and absolute belief in the president’s leadership and integrity that he (Kachikwu), after one year of tolerating the disrespectful and humiliating conduct by Baru, decided to bring the GMD’s acts to the president. He maintained that he had been on a race to stabilise and move the industry to the next phase, adding that parastatal-agencies and all CEOs at these parastatal-agencies must be aligned with the policy drive at the supervising ministry to allow the sector register the growth that had eluded it for many years.
The minister stated that in anticipation of vacancies that would arise from retiring senior executives of the NNPC; he wrote to the GMD a letter requesting that they both have prior review of the proposed appointments.
“Not only did he (Baru) not give my letter the courtesy of a reply, he proceeded to announce the appointments without consultation on board concurrence.
“Mr President, please note that there is a board service committee, whose function is to review potential appointments and termination of senior staff prior to implementation. This committee was also not consulted,” Kachikwu said in his letter.
Kachikwu alleged that against the rules, some major contracts were never reviewed or discussed with him or the board of NNPC.
Some of these contracts, he stated, include the Crude Term contracts, valued at over $10bn; the DSDP contracts, valued at over $5bn; the AKK pipeline contract, valued at about $3bn; various financing allocation funding contracts with the NOCs, valued at over $3bn; various NPDC production service contracts, valued at over $3bn to $4bn.
“The legal and procedural requirement is 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.
In a swift reaction, the Senate has constituted an adhoc committee to investigate the content of a leaked letter by the minister of state for petroleum resources, Ibe Kachikwu, against the group managing director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru.
The nine-man committee headed by former Sokoto State governor, Aliyu Wammako, is also expected to investigate the policy introduced by Baru, for allegedly allocating almost all petroleum products to Duke Oil.
This followed a motion moved on Wednesday, by the chairman, Senate Committee on Ethics Privileges and Public Petitions, Samuel Anyanwu. The lawmaker accused the NNPC GMD of large-scale corruption in his dealings with Duke Oil.
He pointed out that the company was being used as a conduit pipe for swindling the nation.
According to Anyanwu, the lack of transparency in favour of Duke Oil to lift products without payment, as against its competitors in the sector, has helped to stifle the growth of indigenous companies operating in the sector.
“Further aware that Duke Oil, compared to other major players in the sector, is still grappling with the basics of what it was registered to do, in spite of massive support from the NNPC, owing to large-scale corruption.
“Aware of the decision by the current GMD to allocate almost all products to Duke Oil, this is in addition to its automatic inclusion in the lifting of Crude Oil, Gas etc, which thus, made Duke Oil a money spinning outfit that is accountable only to the NNPC.
“Aware that Duke Oil remains the sole importer of AGO to PPMC and Retail, which it does through third party, since it cannot import by itself, this contributes in slowing the growth of our indigenous companies that are making giant strides in the sector.
“Aware that since NNPC owns NNPC Trading Limited and the refineries, they also shortlist companies that get allocation of products, lifting of crude oil and importation of products, thus giving undue advantage to the in-house company, even where it lacks the capacity and requisite requirements to do what it is doing today.
“Further aware that these have combined to make Duke Oil the highest money earner and at the same time, the highest money waster because of the massive corruption in the way and manner they transact business.
“Concerned that Duke Oil lacks the requisite credentials to trade internationally, it therefore, makes Duke Oil a giant commission agent only.
“Also concerned that the net effect of the above arrangement is that NNPC, and by extension, Nigeria earns less than otherwise it would have if the process is open and transparent, where products are sold directly to indigenous international oil traders,” he said.
Announcing the committee, Senate president, Bukola Saraki did not however, state a timeframe within which the committee would submit its report.
Saraki named other members of the ad-hoc committee to include the chairman Senate Committee on Petroleum Upstream, Tayo Alasoadura; his counterpart in Petroleum Downstream and Gas, Kabir Marafa, and Albert Bassey, respectively.
Others include: Sam Anyanwu, Ahmed Ogembe, Chukwuka Utazi, Rose Okoh, and Baba Kaka Garbai.
Earlier, moving an additional prayer, Marafa submitted that the ad-hoc committee should also investigate the allegation made against the GMD of NNPC by the minister, as contained in his letter to the President.
This, he explained, would avoid the issue of moving a substantive motion on the matter, adding that the Senate would be failing in its responsibilities if it overlooked the contents of the leaked document, and Sunny Ogbuoji seconded this.
Experts say the power tussle between the minister and NNPC boss could threaten reforms in the oil industry.
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