The Nigeria National Petroleum Corporation (NNPC) on Monday said Ibe Kachikwu’s allegations against its Group Managing Director, Maikanti Baru, are baseless and untrue.
Kachikwu had, in a letter to President Muhammadu Buhari dated August 30, 2017, accused Baru of lack of adherence to due process in the award of NNPC contracts.
He had said the Crude Term contracts valued at over $5 billion and DSDP contracts valued at over $5 billion were never reviewed or discussed with him as NNPC Board Chairman.
He said that other contracts handled that way include the Ajaokuta-Kaduna-Kano pipeline valued at approximately $3 billion.
But in a statement in Abuja, NNPC said that its law and rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.
The statement was signed by Ndu Ughamadu, the corporation’s Group General Manager, Group Public Affairs Division.
It is important to state that the Crude Term Contract and the DSDP contract are not contracts for procurement of goods, works or services.
Rather, they are a list of approved off-takers of Nigerian crude oil of all grades 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.
It is, therefore, inappropriate to attach a value to it with the aim of classifying it as contract above management limit.’
The corporation stated that what was important in processing and approving contracts was the President in his executive capacity or as Minister of Petroleum or the Federal Executive Council (FEC).
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.
It should be noted that for the Crude Term Contract and the DSDP agreements, there are no specific values attached to each transaction to warrant the values of $10 billion and $5 billion, respectively, placed on them in Kachikwu’s claim.
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,’’ it said.
It added that contrary to Kachikwu’s assertion that he was never involved in the 2017/2018 contracting process for the Crude Oil Term Contracts, “the minister was consulted and his recommendations taken into account”.
It said that the Bureau of Public Procurement (BPP) had also clarified that NNPC Tenders Board (NTB) was not the same as NNPC Board.
The governing board (NNPC Board) is responsible for approval of work programmes, corporate plans and budgets, while the NTB is responsible for approval of day-to-day procurement implementation.
From the foregoing, the allegations were baseless and due process has been followed in the various activities,’’ the NNPC said.
The statement was silent on other allegations by Kachikwu, including the strained working relationship between him and Baru, and absence of the GMD at meetings.
When contacted, Ughamadu said the contract issue “is the most critical. We will respond to other allegations too but the contract issue is the most critical.”
Read the full statement HERE.