Face-off over control of NNPC

Rightly or wrongly, the Nigerian National Petroleum Corporation (NNPC) is an octopus. As of today, it is the biggest revenue earner and the most profitable government agency. For Nigerians, the more you look at the workings in NNPC, the less you see.

There is seldom any year NNPC does not give itself a bad name. Perennially, it faces the knife, especially from the National Assembly. Lawmakers always express frustration of their inability to assess the financial records of NNPC. Apparently out of frustration, they always accuse the national oil company of carrying out its business in secrecy.

In the unfolding event, the story is however different. The NNPC is at war with itself. On Tuesday, a letter addressed to President Muhammadu Buhari by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, wherein he accused the Group Managing Director (GMD) of NNPC, Dr Maikanti Baru of insubordination and financial recklessness, was leaked to the press.

In the August 30, 2017 memo, Kachikwu attributed the slow growth in the oil and gas sector to illegal practices by the departments and agencies under his ministry, especially the NNPC headed by the GMD of Baru.

He told President Buhari that the country’s petroleum industry would have recorded tremendous progress, but for Baru’s alleged inaction.

Kachikwu who also presented five prayers to the President to save the oil sector from collapse, said he was always being blocked from seeing the President. He said he was disturbed that $25 billion contracts were awarded by Baru without his input and that of the board.

The memo reads in part: “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 doesnot 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 $10bThe 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.”

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 an appointment to see you despite very many attempts.

“Mr. President, like many other Nigerians, I resumed work confronted by many publications of massive changes within the NNPC. Like the previous reorganisations and repostings 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.