Kachikwu, Baru Faceoff: Senate Probes NNPC’s Appointments, Contract Frauds

Posted by African Examiner Featured, Latest Headlines, News Thursday, October 5th, 2017

Ayo Balogun, Abuja

(AFRICAN EXAMINER) – Irked by the raging face-off between the Minister of State for Petroleum Resources Dr. Ibe Kachikwu and Nigerian National Petroleum Corporation (NNPC) Group Managing Director (GMD) Dr. Maikanti Baru, Nigerian senate has raised an ad hoc committee to probe the activities and allegations of frauds in the corporation.

Nigerians were shocked on Tuesday to read about Dr Kachikwu’s leaked memo to the president where he indicted Baru over $25 billion contract he awarded without due process as well as lopsided and arbitrary appointments in NNPC without recourse to the board.

“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.” Dr Kachikwu stated in his leaked memo to the president.

However, in a motion moved by Senator Anyanwu, senators who contributed to the motion blasted Dr Baru and his management style.

Senator Anyanwu’s motion reads: “The Senate, aware that NNPC Trading limited is a business creation of the Nigeria National Petroleum Corporation;

“Aware that NNPC Trading is composed of the following outfits, Duke Oil; Hyson/Carlson (JV); NAP Oil (JV); and West Africa-Gas LTD (JV);

“Aware that Duke Oil was incorporated in 1989 in Panama and therefore, does not pay tax in Nigeria;

“Aware also that Duke Oil was specially registered to play a dominant role in the trading of petroleum products especially crude oil trade in the international oil market several years ago;

“Further aware that Duke Oil, compared to other major players in the sector, is still grappling with the basics of what it was registered to do in spite of massive support from the NNPC, owing to large scale corruption;

“Aware of the decision by the current GMD to allocate almost all products to Duke Oil, this is in addition to its automatic inclusion in the lifting of Crude Oil, Gas etc, which thus, made Duke oil a money spinning outfit that is accountable only to NNPC;

“Aware that Duke Oil remains the sole importer of AGO to PPMC and Retail, which it does through third party since it cannot import by itself, this contributes in slowing the growth of our indigenous companies that are making giant strides in the sector;

“Aware that since NNPC owns NNPC Trading Limited and the refineries, they also shortlist companies that get allocation of products, lifting of crude oil and importation of products thus, giving undue advantage to the in-house company, even where it lacks the capacity and requisite requirements to do what it is doing today;

“Also aware of the general lack of transparency and level playing field in favour of Duke Oil to lift products without payment as against its competitors in the sector;

“Further aware that these have combined to make Duke Oil the highest money earner and at the same time, the highest money waster because of the massive corruption in the way and manner they transact business; “Concerned that this relationship has helped to greatly stifle the growth of indigenous companies operating in the sector; “Concerned that Duke Oil lacks the requisite credentials to trade internationally, it therefore, makes Duke Oil a giant commission agent only;

“Also, concerned that the net effect of the above arrangement is that, NNPC and by extension, Nigeria earns less than otherwise it would have if the process is open and transparent where products are sold directly to indigenous international oil traders;

“Further concerned that money so far earned by NNPC Trading limited through its subsidiaries such as Duke Oil, remains only in the knowledge of NNPC officials.”

After debating the motion, the Senate consequently raised a 9-man committee to probe the activities of the corporation.

The committee is headed by Senator Aliyu Wamakko, with senators Bassey Albert Akpan (PDP) Akwa Ibom North East; Tayo Alasoadura, APC, Ondo Central; Kabir Marafa, APC, Zamfara Central; Samuel Anyanwu, PDP, Imo East; Ahmed Ogembe, PDP, Kogi Central; Rose Oko, PDP, Cross River North; Chukwuka Utazi, PDP, Enugu North; and Baba Kaka Garba, APC, Borno Central, as members.