Kachikwu protests award of $25b contracts by NNPC

A crisis of confidence has broken out between Minister of State for Petroleum Resources Dr. Emmanuel Ibe Kachikwu and Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD)  Dr. Maikanti Baru.

The minister has accused the GMD of awarding $25billion contracts without consulting either his office or the corporation’s board.

He blamed the GMD for alleged insubordination, lack of adherence to due process and running a “bravado management style”.

Kachikwu said he was being sidelined by the GMD and other heads of parastatals in major decisions and appointments.

He urged President Muhammadu Buhari to call the GMD to order to ensure due process and transparency in the oil sector.

Kachikwu also presented five prayers to the President to save the oil sector from collapse. He said he was always being blocked from seeing the President.

Kachikwu,  in an August 30 memo to Buhari, said he was neither anti-North nor corrupt as being alleged.

He said he was disturbed that $25billion contracts were awarded by Baru without his input and that of the Board.

The memo said: “The legal and procedural requirement is that all contracts above $20million would need to be reviewed and approved by the Board of the NNPC. Mr. President, in over one year of Dr. Baru’s tenure, no contract has been run through the Board. This is despite my diplomatic encouragement to Dr. Baru to do so to avoid wrongfully painting you as a President who does not allow due process to thrive in the NNPC.

“Given the history of malpractices and the public perception of the NNPC as having a history of non-transparency, the NNPC Tenders Board (NTB) cannot be the final clearance authority for contracts it enters into.

“The NTB, which is a collection of level NNPC executives and COOs, with the GMD as chairman cannot continue to be the final approval authority for multimillion dollar contracts and transactions involving NNPC to the exclusion of the Board.

Board members have singularly and collectively raised these issues to no avail. “The following major contracts were never reviewed by or discussed with me or the Board of NNPC:

·         The Crude Term Contracts – value at over $10b

·         The DSDP contracts – value over $5b

·         The AKK pipeline contract – value approximately $3b

·         Various financing allocation funding contracts with the NOCs – value over $3bn

·         Various NPDC production service contracts – value at over $3bn – $4bn

”There are many more Your Excellency. In most of these activities, the explanation of the GMD is that you are the minister of petroleum and your approvals were obtained. However, the correct governance should be that the Minister of State and the Board review the transaction and give their concurrence prior to presentation to you.

“As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media. The question is why is it that other parastatals which I supervise as Minister of State or Chair of their Boards are able to go through these contractual and mandatory governance processes and yet NNPC is exempt from these?

“I know that this bravado management style runs contrary to the cleansing operations you engaged me to carry out at the inception of your administration. This is also not in consonance with your own renowned standards of integrity.”

Kachikwu also said he was being disrespected by the GMD

He added: I would have wanted to come personally after receiving you at the airport to felicitate with you and discuss matters herein contained, however, I have been unable to secure on appointment to see you despite very many attempts.

“Mr. President, yesterday like many other Nigerians, I resumed work confronted by many publications of massive changes within the NNPC. Like the previous reorganisations and reposting done since Dr. Baru resumed as GMD. I was never given the opportunity before the announcements to discuss these appointments. This is so despite being minister of State Petroleum and Chairman NNPC Board.

”The Board of NNPC which you appointed and, which has met every month since its inauguration and, which by the statutes of NNPC is meant to review these planned appointments and postings, was never briefed. Members of the Board learnt of these appointments from the pages of social media and the press release of NNPC.

”I only need to add that previous attempts to rush through these appointments through non-governance backdoor and present same to the Acting President were met with a request that this be discussed with me. This was never done.

“Indeed in anticipation of vacancies that would arise from retiring senior executives of NNPC, I wrote the GMD a letter requesting that we both have prior review of the proposed appointments. This was to enable me present same to the Board

“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 reply, he proceeded to announce the appointments without consultation or  Board concurrence.

“Mr. President, please note that there is a Board Services Committee whose function is to review potential appointments and terminations of Senior Staff prior to implementation. This committee was also not consulted.

The Minister presented five prayers to the President to save the oil sector from collapse.

The memo said: “My prayers most humbly and respectively are:

·              That we save NNPC and the oil industry from collapse arising from the above non-transparent practices and empower the Board you inaugurated to do the needful.

·              That you save the office  of the Minister of State from further humiliation and disrespect  by compelling all parastatals to submit to oversight regulatory mandate and proper supervision which I am supposed to manage on your behalf.

·              You kindly instruct the GMD to effectively leave NNPC to run as a proper institution and report out along due process lines to the Board and that your Excellency instructs that all reviews be done with the Minister of State prior to your decision.

·              That to set the right examples, you approve that the recently announced reorganization changes be suspended until the GMD, myself and the Board have made relevant input to same. This will send a clear signal of process and transparency.

·              That Your Excellency encourages joint presentation meetings between heads of parastatals and the Minister of State to you so as to encourage a culture of working together and implant discipline in the hierarchy.

“These in my view, Mr. President, will provide you balanced analysis on issues and avoid exposing the exalted office of Mr. President to ridicule. It will also reduce nonproductive, unsubstantiated rumour peddling.”

NNPC spokesman: I’m not aware

It’s a normal procedural correspondence, says ministry

Spokesman of the Nigerian National Petroleum Corporation (NNPC) Mr Ndu Ughamadu told our reporter at about 9pm yesterday that he had not seen or heard about the minister’s letter. He said he could not comment on it adding that he had just returned from Maiduguri where he went on an assignment.

But the Ministry of Petroleum Resources in a statement by its Director of Press Idang Alibi titled: ‘publication of a confidential official correspondennce’ said: “The attention of the Ministry of Petroleum Resources has been drawn to a publication on a memo emanating from the HMSPR to the President.

“Please note the following:   The communication under reference is a normal procedural correspondence by the Minister to the President relating to developments in parastatals under his supervision.

“It is most distressing to the ministry of petroleum resources that a confidential communication to the President on the performance of one of its parastatals can be made public.

“The focus of the communication was on improving efficiency and deepening transparency in the oil and gas sector for continued investor confidence.

“It is noteworthy that the President has been fully supportive of the efforts of the Ministry to entrench good governance and accountability in the oil and gas sector.

“The Ministry of Petroleum Resources remains focused on achieving measurable progress in the implementation of the ongoing oil sector reforms in line with the mandate of the President.”

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