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Drama, confusion trail NNPC contracts

Vice-President-Yemi-Osinbajo1

The drama and confusion over the raging contract controversies rocking the Nigerian National Petroleum Corporation (NNPC) got messier, yesterday, as Vice President Yemi Osinbajo denied approving the contentious $26 billion deal, barely hours after his Senior Special Assistant on Media and Publicity, Laolu Akande confirmed he did, in a series of tweet.

Speaking in Bonny Island where he flagged off the Bodo-Bonny Road, Rivers State, Osinbajo said he  approved two loans for the NNPC and not contracts.

Akande, had on his  twitter handle @akandeoj, confirmed that the contracts were approved after due diligence by the vice president when he acted as president recently.

Akande said Osinbajo approved the recommendations for the contracts as part of necessary actions to deal with backlog of unpaid cash calls and incentivise investments.

He said he made the clarification in view of media enquiries that followed NNPC’s claim that the contracts were indeed approved by Osinbajo.

The tweets stated: “In response to media inquiries on NNPC joint venture financing, VP Osinbajo, as Ag President approved recommendations after due diligence & adherence to established procedure. Action necessary to deal with huge backlog of unpaid cash calls which Buhari adm. inherited and also to incentivize much needed  fresh investments in the oil & gas sector.”

Few hours later, Osinbajo, dissociated himself from his aide’s tweets saying: “They were financing loans, joint venture loans…While the president was away, I granted authorisation, which is what the law provides. The law actually provides for that authorisation, so I did grant all of those. In fact, there were two of them but those are presidential approvals but they are specifically for financing joint ventures and they are loans not contracts.”

The contracts had caused fiction between the Minister of State for Petroleum Resources, Ibe Kachikwu and the NNPC Group Managing Director (GMD), Maikanti Baru.

Kachikwu’s letter to the president in which he alleged gross insubordination by the GMD of NNPC was leaked to the media last week.

He had alleged that Baru awarded $25 billion contract without following due process. He also alleged that the contract was struck without consulting the office of the Minister of State for Petroleum Resources or the board of the corporation.

Baru hasd earlier in the week responded to the allegations of lack of adherence to due process in the contracts award.

He said in a statement that the allegations were baseless and due process 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 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,” the statement said.

It added: “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 $10 billion and $5 billion 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.…ACF wants Buhari call Kachikwu, Baru to order

As the controversy gets messier,  the Arewa Consultative Forum (ACF) called on President Buhari to call Kachikwu and Baru to order in the interest of the country.

The northern foremost socio-cultural group also called on the president to conduct an investigate  into the allegations in order to know the actual facts in the interest of transparency in management practices of NNPC.

The ACF’s position was contained in a communique issued at the end of its National Executive Council (NEC) meeting.

In the communique signed by its National Publicity Secretary, Muhammad Ibrahim Biu, ACF  expressed regret at the continued accusations and counter accusations by the two public officers, which, it said was avoidable and unnecessary,  considering the important role of the petroleum industry under their watch to the nation’s economy.

“ACF, therefore, appeals to President Buhari to call the officers concern to order or better still, let the Minister and the GMD resolve their differences amicably in the interest of the oil industry and the nation,” it said.

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