Baru Replies Kachikwu, Denies Sidelining Minister

The Group Managing Director of the Nigerian National Petroleum Corporation, Maikanti Baru, has denied he sidelined the Minister of State for Petroleum, Ibeh Kachikwu, in award of contracts.
In a memo to President Muhammadu Buhari, leaked last week to the media, Kachikwu detailed several alleged misdeeds of Baru, including the unilateral award of oil and gas contracts totaling about N9 trillion. The Minister had said the contracts did not go through board, which he (Kachikwu) is the Chairman. He also accused Baru of insubordination.
But in a lengthy response to Kachikwu’s accusations, Baru, Monday, denied all the allegations, backing the denial with figures and tables.
In a statement signed by Ndu Ughamadu, Group General Manager, Group Public Affairs Division, NNPC, Baru said not all contracts necessarily have to go through the the Minister.
The statement titled: RE: ALLEGATIONS OF LACK OF ADHERENCE TO DUE PROCESS IN NNPC CONTRACT Awards, said in part: “Following the publication of alleged lack of adherence to due process in the award of NNPC contracts, the President ordered the Group Managing Director (GMD) and Management of the Nigerian National Petroleum Corporation (NNPC) to consider and respond expeditiously to the allegations.
“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.
“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. 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.”
In conclusion, the statement added: “For the benefit of doubt, it is confirmed that there is no single NPDC contract that has been approved by the relevant Tenders Board beyond its limit of financial authority and there is no single contract that is in the $3Bn to $4Bn range claimed in the write-up
“From the foregoing, the allegations were baseless and due process has been followed in the various activities.
“Furthermore, it is established that apart from the AKK project and NPDC production service contracts, all the other transactions mentioned were not procurement contracts.
“The NPDC production service contracts have undergone due process, while the AKK contract that requires FEC approval has not reached the stage of contract award.”

Author: News Editor

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