The Nigerian National Petroleum Corporation (NNPC) has described allegations of insubordination and arbitrary award of contract levelled against its Group Managing Director, Maikanti Baru, by Minister of State for Petroleum, Dr Ibe Kachikwu, as untrue and unfortunate.
Kachikwu had in a memo to President Muhammadu Buhari accused the NNPC boss of side-lining him in key decisions and awarding bogus contracts.
He said he was compelled to write the memo, which later leaked because he did not have access to the President.
An embarrassed Buhari met both men last week and ordered Baru and NNPC to respond to the petition.
Responding through a statement by General Manager, Group Public Affairs Division, Ndu Ughamadu, in Abuja on Monday, the NNPC said it was “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, 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 also denied allegations of awarding bogus contracts, saying Kachikwu exaggerated figures to push his claims.
“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,” the corporation said.
“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.”