Revealed! NNPC Act places Kachikwu over Baru

Contrary to the submissions contained in the statement from the Nigerian National Petroleum Corporation (NNPC) on Monday, which indicated that the Minister of Petroleum Resources and the Governing Board of  the NNPC have no roles in the award of contracts by the Corporation, it has emerged that the  NNPC Act 1977 gives power of control over the corporation to the Minister.

The NNPC, in defending the roles of its Group Managing Director, Makanti Baru in the allegations of lack of due process in the award of $25 billion contracts levelled against him by the Minister of state for Petroleum Resources, Ibe Kachiwku had stated that the Minister and the Board are redundant in the award of contracts.

But details contained in the 1977 Act setting up the NNPC cited in the Laws of the Federation of Nigeria, 2004 indicated that the Minister and the board have supervisory roles on the NNPC.

Section 1 of the 1977 Act indicated that: “There shall be established a corporation by the name of the Nigerian National Petroleum Corporation (hereinafter in the Act referred to as “the Corporation”) which shall be a body corporate with perpetual succession and a common seal and may sue or be sued in its corporate name.

Section 1(2) of the Act states that “The affairs of the Corporation shall, subject to Part II of this Act, be conducted by a Board of Directors of the Corporation which shall consist of a Chairman and the following other members, that is-  (a) the Director-General, Federal Ministry of Finance and Economic Development; (b) the Managing Director of the
Corporation; and (c) three persons to be appointed by the National Council of Ministers, being persons who by reason of their ability, experience or specialised knowledge of the oil industry or of business or professional attainments are capable of making useful contributions to the work of the Corporation.

In Section 1(3) of the Act, the Minister is recognised as the Chairman of the Board, whose duties are spelt out in subsection 2 of the Act.

The section states that “The Chairman shall be a Minister in the Government of the Federation to be known and styled as the Minister of Petroleum Resources.”

In Section 2. (1) of the Act, the law empowers the President to appoint an alternate Chairman for the Corporation, who shall exercise some of the assigned responsibilities.

It states: “There may be appointed by the President an Alternate Chairman who may, pursuant to any general or special delegation given in that behalf by the Minister exercise the powers conferred upon the Minister or Chairman under this Act:   Provided that nothing in the foregoing shall be construed as preventing the exercise by the Minister himself of any power so delegated.”

The office of the Group Managing Director (GMD was established in Section 3 (1) of the Act, which empowers him to run the day-to-day affairs of the corporation.

Section 3. (1) states: “There shall be appointed by the National Council of Ministers, a Managing Director of the Corporation who shall be the chief executive officer of the Corporation and shall, subject to Part II of this Act, be responsible for the execution of the policy of the Corporation and the day-to-day running of the Corporation’s
activities and its associated services.”

Part II of the Act mentioned above established the Petroleum Directorate of the Corporation, which shall exercise its functions upon being delegated by the Minister.

The Inspectorate Department established in Section 10 of the Act is recognised as an integral part of the NNPC but is expected to take directives from the Minister.

Section 10. (1) of the Act states: “There shall be established a department to be known as the Petroleum Inspectorate which shall, subject to the other provisions of this Part, be an integral part of the Corporation.

The Act further establishes the powers of the Minister to exercise direct control on Petroleum Inspectorate by stating thus: 10 (2) “The Minister may delegate to the Alternate Chairman (where one is appointed) or the chief executive of the Inspectorate such of the powers conferred upon him under the Oil Pipelines Act, the Petroleum Act or any other enactment as he may deem necessary and in particular, but without prejudice to the generality of the foregoing,
responsibility for the following matters, that is- (a) issuing permits and licences for all activities connected with petroleum exploration and exploitation and the refining, storage, marketing, transportation and distribution thereof;
and (b) acting as the agency for the enforcement of the provisions of the said Acts and any relevant regulations made there under by the Minister; (c) carrying out such other functions as the Minister may direct from time to time, and notwithstanding the foregoing, any regulatory function conferred on the Minister pursuant to the said
Acts or any other enactment shall, as from the appointed day, be deemed to have been conferred upon and may be discharged by the chief executive of the Inspectorate.

(3) In the exercise of the powers conferred upon the chief executive of the Inspectorate under this Act, he shall not be subject to the direction or control of any other person or authority in the Corporation except the Minister.”

In another development, investigations revealed on Tuesday that the Presidency appears to be in dilemma over the fate of Kachikwu in the unfolding saga.

Kachikwu in a well worded letter to the President had accused Baru of insubordination and total neglect of the office of the Minister of State Petroleum Resources.

Sources however stated that the Presidency is not considering strong measures against the Minister in view of what a source said has to do with his path to the cabinet.

President Muhammadu Buhari was said to have consented to the choice of Kachikwu after he had been sold by some influential Nigerians who advised the President on the way to go if he was to make a success of the oil sector in his tenure.

It was learnt that the same influential persons had earlier suggested Kachikwu to former President Goodluck Jonathan, who was said to have reneged on naming him at the last minute.

Said a source: “The Presidency is disposed to handling the unfolding saga with caution. Rather than fire Kachikwu just like that, the Presidency is rather considering strategic measures which would not suggest either the Minister of Baru is victimised or punished,” a source said adding that the next few days may be devoted to “dousing the tension.”

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