On Kachikwu’s memo
It is no longer news that the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, wrote a memo to President Muhammadu Buhari, alleging contract awards to the tune of $25 billion in one year without consulting him or the board. In his leaked memo, Kachikwu accused the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, of insubordination and reversal of some of the gains he (Kachikwu) made while in charge of the corporation. The minister also alleged that the GMD made some appointments without consulting the board and awarded contracts without due process.
But many industry players have seen the memo as a calculated attempt to embarrass the Federal Government and an attempt to undermine the good works of the GMD.
It is indeed an unfortunate situation for the nation’s oil sector and one wonders why the hullabaloo now. As Ndu Ughamadu rightly pointed out, the NNPC and its GMD are only following the laid down rules of the industry.
In its reaction, the corporation said it was inappropriate to attach arbitrary values to shortlists, with the aim of classifying the transactions as contracts above the NNPC Tenders Board limit. They are merely a shortlist of prospective off-takers of crude oil and suppliers of petroleum products under agreed terms. The law and the rules do not require a review or discussion with the minister of state or the NNPC Board on such contractual matters.
According to industry experts, “The Board has no role in contracts approval process as advised by the BPP. These transactions were not required to be presented as contracts to the Board of the NNPC, and, of course, the monetary value of any crude oil eventually lifted by any of the companies goes into the Federation Account.’’
Meanwhile, the NNPC said all the contracts listed in Kachikwu’s memo were validly conducted within its expenditure limits. According to the corporation, “Detailed evaluation was carried out and the shortlist of the successful off-takers was presented to the approving authority (Mr. President) for consideration and approval.”
Kachikwu and his supporters should know that the structure and roles of the NNPC Tenders Board (NTB) and the Board appointed by government are quite distinct. While the NNPC Board is a governing board that has oversight over the approval of work programmes, corporate plans and budgets, the NTB is responsible for approval of dayto-day procurement implementation.
As a former GMD of the NNPC, the minister is expected to know that the NTB comprises of the accounting officer (GMD) as the chairman, with heads of departments while the head of procurement (GGM SCM) serves as secretary.
Meanwhile, people should sheathe their swords as Kachikwu has already stated that his memo to the president was not aimed at exposing fraud in his ministry; instead he was proffering solutions on how to move the oil and gas sector forward. He stressed that he had an unalloyed confidence in the president. Also, during a three-day Nigerian content workshop at the Imo Trade and Investment Centre, Owerri, Kachikwu said he understood President Buhari as a very meticulous leader and wondered why his memo became a subject of public discussion, stressing that people should see the memo as an attempt to put the country on the path of good governance.