NNPC: Kachikwu’s input not required in contract award

The NNPC statement provided details of its contracting or procurement processes. It however did not address the minister’s allegation of unilateral appointments, redeployments or postings superintended by Baru.

The corporation had on August 29, 2017 announced major appointments and redeployments. Kachikwu, in a letter to the president the next day (August 30),said the NNPC board was never briefed about the appointments or redeployments.

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

When contacted on why the corporation did not respond to allegations of appointments or redeployments, Ughamadu told Daily Trust that the GMD addressed the issue when PENGASSAN members paid him a solidarity visit later on Monday.

He said Dr. Baru dismissed the allegations as unfounded and unfortunate, adding that when he asked the union leaders if their members felt disenchanted, they chorused a resounding “no”.

He urged the union leaders to enlighten their members on the facts and encourage them to go about their duties without distraction.

On the allegation that major contracts were never reviewed, the NNPC, relying on procurement laws and civil service circulars, said that no law required the GMD to review or discuss contractual matters with the Minister of State or the NNPC Board. “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,” the statement said.

“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 added.

On the allegation that $10 billion Crude Term Contract and $5 billion Direct Sale and Direct Purchase (DSDP) contracts were awarded, the NNPC said both transactions did not have specific values attached to them.

NNPC said both of them were not contracts for any procurement of goods, works or services, but simply a list of offtakers of crude oil and suppliers of petroleum products.

“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,” the oil company said.

‘Kachikwu sought, got clarification on NNPC as GMD’

The NNPC said it had cause to clarify severally from the Bureau of Public Procurement (BPP) as to the composition and approving authority for the contracts and got clarifications.

“NNPC Tenders Board (NTB) is not the same as NNPC Board. The governing board (NNPC Board) is responsible for approval of work programmes, corporate plans and budgets, while the NTB is responsible for approval of day-to-day procurement implementation,” it said.

It added that the provisions of the procurement process showed that approvals reside within the NTB (made up of the GMD NNPC as Chairman and other NNPC heads) and where thresholds were exceeded, “the NNPC refers to FEC for approval. Therefore, the NNPC Board has no role in contracts approval process as advised by BPP.”

“All these clarifications were sought and obtained prior to August, 2015 and were implemented by Dr. Kachikwu as the GMD of NNPC. Dr. Kachikwu also constituted the first NNPC Tenders Board on 8th September, 2015 and continued to chair it until his exit in June 2016,” the statement added.

The corporation also said that all established due process was observed leading to the securing of about $3 billion financing for projects in 2016/2017 including the one executed by the minister when he was GMD.

PENGASSAN backs Senate probe

Meanwhile, oil workers under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have vowed to resist any attempt by officials who are not designated for the administration of the NNPC to meddle with the affairs of the corporation.

PENGASSEN in a statement signed by its Group Secretary in NNPC, Comrade Sulaiman Sulaiman, said the workers will stop non-executive officials from using top management positions in the NNPC to settle cronies at the detriment of dedicated staff.

“We are convinced that the recent re-organization in NNPC is in good faith and in tandem with our call for allowing internal growth in the system through hard work and positive appraisals,” it said.

The senior staff said that good practice in corporate governance requires absolute segregation of oversight role from management day-to-day role; asking “Why should a board chairman seek to meddle in internal organizational adjustment?”

According to the workers, contrary to claim in the said letter to the President, staff are no longer afraid to talk or express their opinion, especially with the domestication of whistle blowing policy and reconstitution and launching of the Anti-Corruption Committee by the current GMD.

“In terms of workplace harmony, NNPC has enjoyed the best industrial atmosphere under the present Top Management of NNPC. So far there is zero record of industrial crisis or shutdown, which is the first of its kind in the history of struggle in oil and gas in Nigeria. Thanks to the efforts of the current GMD and the GED Corporate Services,” they said.

They supported the decision of the Senate to investigate the weighty allegations in the minister’s letter.

‘Officials’ spat bad for sector’ oil

On their part, civil society groups and industry experts expressed concerns that continued spat between both officials could have grave consequences on Nigeria’s oil sector.

The Senior Programme Officer (Extractives) Civil Society Legislative Advocacy Centre (CISLAC) Mr. Kolawole Banwo said the developments will make Nigerians lose confidence in how the sector is operated in spite of government’s effort to make the sector work.

“For us, the solution is to build a national oil company and a sector that works purely as it is the best practice all over the world where professionals do professional work and politicians mind their business, where political appointees do not interfere in the economic decisions of running business. NNPC is supposed to be a company that is in business,” Banwo said.

“We need to get our PIB passed and unbundle the NNPC, let the minister face policy making and let professionals do the business, which is the way to go. “So long we have NNPC the way it is, with the NNPC Act conflicting with the constitution, public procurement Act and circulars of civil service you will always have that gap and it creates room for people to take advantage of the system,” he added. (See NNPC’s letter on page 12)