$25billion Contract Saga, Kachikwu’s Role Not Needed, Insists NNPC

NNPC’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, has faulted the assertions of the Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, over the claim that he (Kachikwu) was excluded from the decisions as far as the Crude Oil Term Contracts was concerned. Ughamadu said the decisions were taken by the NNPC management.

Ughamadu’s stance, we understand, was in response to a directive by President Muhammadu Buhari’s to the embattled Group Managing Director, Nigerian National Petroleum Corporation, Mr. Maikanti Baru and his team, to react to the issues raised in the petition by Kachikwu. Baru, said it was most unfortunate for the Minister of State for Petroleum Resources, to assert that he (Kachikwu) was never involved in the recent Crude Oil Term Contracts. Kachikwu, who is the Chairman of the NNPC board, in a leaked memo to President Muhammadu Buhari, revealed that against the rules, Baru awarded major contracts worth $25bn without reviewing or discussing them with him or the corporation’s board.

Kachikwu in the leaked memo informed, “The legal and procedural requirements are that all contracts above $20m would need to be reviewed and approved by the board of NNPC. Mr. President, in over one year of Mr. Baru’s tenure, no contract has been run through the board. As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media.”

In its official response to Kachikwu’s allegations, which established the minister as a mere figure head, the NNPC stated that 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’s approval that is required.”

The NNPC while explaining that its contracting process was governed by the provisions of the NNPC Act; Public Procurement Act, 2007; and procurement method and thresholds of application and the composition of Tenders Board as provided by the Secretary to the Government of the Federation Circular reference no. SGF/OP/1/S.3/VIII/57, dated 11th March, 2009, however said Kachikwu’s memo to the President was unfortunate.

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