Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Dr Maikanti Baru on Monday tried to debunk allegations of lack of transparency and insubordination leveled against him by Minister of State, Petroleum Resources, Dr Ibe Kachikwu.
He said his reaction was ordered by President Muhammadu Buhari.
However, while he backed his explanations over lack of transparency in award of contracts with some facts including obtaining approvals from President Muhammadu Buhari who is substantive Minister of Petroleum Resources, he completely neglected to respond to allegations that he made senior management appointments without inputs from either Kachikwu, who is Minister of State and board of directors of the corporation.
Nonetheless, some petroleum stakeholders appear to have thrown their weight behind Baru and NNPC with a staff union asking Kachikwu to stop trying to meddle in the day to day running of the corporation.
There have been much criticisms of recent top level appointments in the NNPC with groups such as Ohaneze Ndigbo and Afenifere lamenting alleged lopsidedness, which had 10 combined representatives from the North West and North East and five from South West and South South. North Central and South East were left out.
In his letter to Buhari, which was leaked to the press last week, the Minister of State had stated “Indeed, in anticipation of vacancies that would arise from retiring senior executives of NNPC, I wrote the GMD (Baru) a letter requesting that we both have prior review of the proposed appointments.
“This was to enable me to present same to the board or give an anticipatory approval and then review with the board later.
“I wrote to the GMD, given previous happenstance of this nature. In addition, thereafter, I called the GMD to a private meeting where I discussed these issues. Needless to say that, not only did he not give my letter the courtesy of a reply, he proceeded to announce the appointments without consultation or board concurrence.”
He added that Baru did not also consult the Board Services Committee, whose function it is to review potential appointments and terminations of senior staff prior to implementation.
The minister also alleged that Baru had sidelined the NNPC Board in the awards of contracts.
However, on award of contracts without due process, Baru in a statement issued by Group General Manager, Group Public Affairs Division of the Corporation, Ndu Ughamadu said “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.”
He disclosed 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”, the statement added.
Going into specifics, Baru said concerning Crude Oil Term Contract (COTC)- valued at over $10bn that it is not a contract for procurement of goods, works or services but rather a simple a list of approved off-takers of Nigerian crude oil of all grades.
“This list does not carry any value, but simply state the terms and conditions for the lifting. It is therefore inappropriate to attach a value to it with the aim of classifying it as contract above Management limit and that in arriving at the off-takers list for 2017/2018 COTC, adverts were placed in National and international print media.
On Direct Sale Direct Purchase (DSDP) Contract valued at over $5bn, he explained that just like the COTC, it is not a contract for any procurement of goods, works or services, rather it is simply a list of off-takers of crude oil and suppliers of petroleum products of equivalent value.
“This list does not carry any value, but simply state the terms and conditions for the lifting and supply of petroleum products. It is therefore mischievous to classify it as contract and attach a value to it that is above Management’s limit” but that even then, “in arriving at the off-takers list for 2017/2018 DSDP, the following steps were followed: a. Work plans and execution strategy for the DSDP was granted by the approving authority (Mr President).
“b. Adverts were placed in National and International print media and NNPC website on Thursday, 22nd December, 2016.
“c. The bids were publicly opened in the presence of all stakeholders (NIETI, DPR, BPP, Civil Society Organisations, NNPC’s SCM Division, and the press as well as live broadcast by the NTA and some TV stations).
“d. Detailed evaluation was carried out and the short list of the successful off-takers was presented to the approving authority (Mr. President) for consideration and approval.”
Reacting, Group Secretary of the Group Executive Council (GEC) of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in NNPC, Comrade Sulaiman Sulaiman, stated that the recent re-organisation in the NNPC was in good faith and encouraged internal growth.
“We are convinced that the recent re-organization in NNPC is in good faith and in tandem with our call for allowing internal growth in the system through hard work and positive appraisals.
“We shall continue to reject and vehemently resist attempts in meddling into the day-to-day running of the organization by non-executive officials of the Corporation. We will not any longer allow our institution to be an avenue to settle friends and cohorts into Management positions of NNPC at the detriment of dedicated staff with all the requisite qualifications within the system.
“Problems will continue to occur as long as the Chairman of the Board will continue to meddle into the day-to-day running of the organizations, which is a Management role. Any attempt to allow this to happen will spell doom for the country and create a window for abuse,” he said.
He asked, “Why should a board chairman seek to meddle in internal organizational adjustment?”
He urged the Board Chairman (Dr. Ibe Kachikwu) to focus on performance appraisal of the Board Committees and its members rather than wanting to dictate appointments or award contracts in NNPC.
However, national President of Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), Comrade Achese
Igwe said it is a political issue that NUPENG do not want to be involved.
He said “our position has never changed and if you observed, I have never made any comment yet. The issue is between Kachikwu and his subordinate.
“Consequently upon that, we have only said in view of the integrity of the oil and gas companies in Nigeria, whatever allegations or comments made should not be swept under the carpet.
“Whatever investigations to be made should be made in the interest of oil and gas companies. Be it to unravel these issues which are in the public domain, Nigerians and international communities are watching what would be the reaction of the government.”
On his part, the Team Lead, Facility for Oil Sector Transparency and Reform in Nigeria (FOSTER), Mr Henry Adigun, stated that Kachikwu’s allegations were just financial transactions and other things.
“Baru’s position on Direct Sales Direct Purchase (DSDP) and crude oil term contract were all correct, they are things the industry knows. The proforma contract on gas from coal has not been put into effect for approval, so all I see is ego issue. I see people fighting each other based on ego and other things,” he said.
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