NNPC boss officially responds to allegations of unethical practice

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The Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) Mr Maikanti Baru has finally responded to allegations of lack of adherence to due process in the award of NNPC contracts levelled against him by Minister of State for Petroleum Resources Dr. Ibe Kachikwu. Baru’s response was sequel to President Muhammadu Buhari’s order to him to consider and respond expeditiously to the allegations.

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NNPC in a statement on Monday said the allegations were baseless and due process was followed in all of its activities. On the allegations by the minister that major contracts were never reviewed or discussed by the NNPC Board, Baru said 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 short-listing 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.

“NNPC said Kachikwu was expressly consulted by the GMD and his recommendations were taken contrary to the assertion that he was never involved in the 2017/2018 contracting process for the crude oil.

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