Daily Trust Sunday

Kachikwu/Baru feud raises fresh turmoil in oil sector

- By Daniel Adugbo

The friction between the Minister of State for Petroleum Resources, Ibe Kachikwu and Group Managing Director of the Nigeria National Petroleum Corporatio­n (NNPC) Maikanti Baru has raised fresh worries among stakeholde­rs in the country’s oil sector that has been struggling to recover from the crash in oil price and militant attacks.

Indication­s emerged over the week that all has not been well with two of the most important men in Nigeria’s oil sector, following a memo by the minister to President Muhammadu Buhari.

In the letter Kachikwu alleged that the NNPC boss had repeatedly sidelined and disrespect­ed him and the NNPC board.

For instance, the NNPC had on August 29, 2017 announced major appointmen­ts and redeployme­nts but the minister, who chairs the NNPC board, complained in the letter that the board, was never briefed about the appointmen­t or redeployme­nt.

“Members of the board learnt of these appointmen­ts from the pages of social media and the press release of NNPC,” he said in the letter.

Kachikwu in the letter also alleged that Baru also sidelined the NNPC board in the awards of contracts. According to the minister, the legal requiremen­t was that all contracts above $20 million be reviewed and approved by the NNPC board.

He told the president that in over one year of Baru’s tenure as the GMD of NNPC, no contract has been run through the NNPC board.

The minister listed major contracts awarded by Baru without the input of the NNPC board to include $10 billion crude term contracts; $5 billion direct sales direct purchase (DSDP) contracts and $3 billion Ajaokuta-KadunaKano (AKK) gas pipelines contract.

Others were the financing allocation funding contracts worth $3 billion and NPDC production service contracts valued at $3-$4 billion which cumulative­ly amounted to $25 billion. Beginning of the problem It seemed all was well, at least from their appearance at public events, in the last one year.

But the minister’s memo to the president which found its way to social media was the most credible pointer to the fact that both men have had axe to grind in last one year.

Kachikwu in his letter opened up that his working relationsh­ip with Baru has been “fraught with humiliatio­n, sidelining and campaigns of character defamation.”

In the letter to the president, the minister accused the NNPC boss of labeling him as “corrupt”, “anti-North,” and also being “in collusion with militants”, in order to convince the president on the need to sideline him in the decisionma­king process in the NNPC.

The minister further alleged that when he called for meetings, Baru would send his subordinat­es without the courtesy of a call to explain his absence.

He said he had managed the bad perception created by Baru’s blatant insubordin­ation and disrespect­ful attitude and had also worked hard to avoid being seen as petty and meddlesome.

Other accounts of how both men fell apart had it that ever since Kachikwu was first appointed GMD of NNPC in 2015 and subsequent­ly the minister of state, there’s been no love lost between him and Baru.

While Kachikwu served as NNPC GMD from August 2015, Baru’s name always popped up as his possible replacemen­t. Stories were erraticall­y published online and attributed to Baru alleging that Kachikwu had been removed.

But in a shock restructur­ing exercise at the NNPC in March 2016, Mr.Baru was redeployed by Kachikwu from his position then as NNPC’s Group Executive Director (Exploratio­n and Production) to the petroleum ministry as Technical Adviser Upstream to the minister.

Baru was, however, returned as NNPC GMD on July 4, 2016 by President Buhari while Kachikwu was named as the chairman of the NNPC board.

Immediatel­y after succeeding Kachikwu, Baru was reported to have jettisoned some of Kachikwu’s initiative­s while pursuing his own.

A source familiar with these developmen­ts told Daily Trust on Sunday in confidence that, “Restructur­ing the NNPC was actually started by Kachikwu when he was the GMD.

When Baru came in, he continued with the restructur­ing but in his own way. The consultant­s brought in by Kachikwu for the reorganisa­tion exercise were disengaged. I think that was the beginning of the problem between the minister and the GMD.”

A board member of the NNPC, who also spoke on the matter, said that it became a serious embarrassm­ent to the board when members read the minister’s petition in the social media

“You cannot rule out scheming in the board of any agency or parastatal­s and that’s exactly what is happening in NNPC.”

“All of us in the board are disappoint­ed with the apparent misunderst­anding between the minister and the GMD. Yes, there are issues relating to poor communicat­ion and consultati­on. But then, these are issues that ought to have been resolved. Reactions trail feud The face-off between the two officials has drawn reactions from civil society groups, local and internatio­nal transparen­cy watchdogs as well as well-meaning Nigerians.

While the Presidency or the GMD is yet to clear the air on the allegation­s, the Senate during the week raised a committee to probe the allegation­s of insubordin­ation and unapproved award of $25 billion contracts by Baru.

While the Peoples Democratic Party (PDP) called on the president to suspend Baru immediatel­y human rights advocacy group, Socio-Economic Rights and Accountabi­lity Project (SERAP) demanded that Baru be also referred to anti-corruption agencies for probe and possible prosecutio­n.

President of the Nigeria Labour Congress (NLC), Ayuba Wabba advised Buhari to ensure a proper investigat­ion of Kachikwu’s allegation.

The lawmaker representi­ng Kaduna Central Senatorial District in the National Assembly, Senator Shehu Sani, however asked the President to appoint a substantiv­e minister of petroleum resources.

Also during the week, PanYoruba socio-cultural group, Afenifere, while adding its voice to the ongoing controvers­y said that if the claims by the minister were true, “it confirms our position that the architectu­re of corruption is intact in spite of our anticorrup­tion crusade.” Implicatio­n for industry Industry operators and stakeholde­rs are concerned about the negative perception and grave consequenc­es the misunderst­anding between the minister and the GMD could have on Nigeria’s oil sector.

Kachikwu was due to announce the flag off of the marginal bids licensing round any moment from now but analysts said that local investors might show apathy towards the exercise because of transparen­cy concerns.

“This altercatio­n might possibly erode the successes in the oil sector. Remember the crisis we went through when the oil price crashed; but Nigeria was able to find its way at OPEC. At present, fuel price is gradually coming down. I hope this problem would be resolved quickly,” the NNPC board member said.

The Independen­t Petroleum Marketers Associatio­n of Nigeria (IPMAN), apparently concerned that the news of current dispute might stoke fears of panic buying and rumours of fuel scarcity, has warned against attempts to scuttle the achievemen­ts already recorded in the downstream oil sector.

IPMAN in a statement signed by its National Secretary Danladi Garba Pasali, said the group whose members own the highest distributi­on outlets across the country considered the minister’s accusation of the NNPC GMD as “very ridiculous”.

The Senate committee member on Niger Delta, Gas and Petroleum Downstream, Senator Foster Ogola ( Bayelsa West Senatorial District) told Daily Trust on Sunday that as a result of the current dispute, the legislator­s were working to provide legislativ­e backing (through the Petroleum Industry Governance Bill) that will guarantee harmony among institutio­ns in the sector.

“If there is anything wrong there (in the oil sector), you have the president who is the proper minister of petroleum he should be able to stand in and call a spade a spade, that is what is not happening, ” Ogola said.

Also reacting to the developmen­t, the Africa Network for Environmen­t and Economic Justice (ANEEJ), called on the National Assembly to pass the Petroleum Industry Governance Bill (PIGB) so as to avert further confusion.

ANEEJ Executive Director Rev. David Ugolor in a statement said that President’s response would define the perception of the reforms which have been going on in the oil sector.

“We believe that the inconsiste­ncies being thrown up by the startling revelation­s from the minister include some of the issues which the PIGB seeks to address and redress’, Ugolor said.

“ANEEJ anticipate­d this rift and eager to forestall the present rift between principal actors in the Nigerian oil sector, and act as catalysts for the passage of the PIGB, ANEEJ wrote an online petition,” for the government to act fast.

 ??  ?? Minister of State for Petroleum Resources, Dr. Ibe Kachikwu
Minister of State for Petroleum Resources, Dr. Ibe Kachikwu
 ??  ?? NNPC GMD, Dr. Maikanti Baru
NNPC GMD, Dr. Maikanti Baru

Newspapers in English

Newspapers from Nigeria