NNPC: Kachikwu’s consent not needed in contract awards

The Nigerian National Petroleum Corporation (NNPC) has responded to the leaked letter of Ibe Kachikwu, minister of state for petroleum resources, describing most of his allegations as false.

In a detailed statement signed by Ndu Ughamadu, group general manager, group public affairs division, the national oil company said Kachikwu’s allegations are “baseless”, maintaining that due process was followed and his consent is not needed in thee award of the contracts he complained about.

Kachikwu had alleged insubordination and humiliation by Maikanti Baru, the group managing director of NNPC, in a memo to President Muhammadu Buhari, who doubles as the minister of petroleum. According to The Cable, he also alleged that contracts worth $26 billion were awarded by the NNPC without his knowledge or approval by the governing board of the corporation.

Ughamadu said: “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.”