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From: Juliana Taiwo-Obalonye, Abuja
Vice President Yemi Osinbajo has admitted to approving contracts for the Nigeria National Petroleum Corporation (NNPC) which had become contentious between the Minister of State for Petroleum Resources, Ibe Kachikwu and the NNPC Group Managing Director (GMD), Maikanti Baru.
Senior Special Assistant on Media and Publicity, Laolu Akande, in a series of tweets on his twitter handle @akandeoj, on Thursday, confirmed that the contracts were approved after due diligence by the Vice President when he acted as President, recently.
Akande said Osinbajo approved the recommendations for the contracts as part of necessary actions to deal with backlog of unpaid cash calls and incentivise investments.
He said Osinbajo made the clarification in view of media enquiries that followed NNPC’s claim that the contracts were indeed approved by Osinbajo.
The tweets stated: “In response to media inquiries on NNPC joint venture financing, VP Osinbajo, as Ag President approved recommendations after due diligence & adherence to established procedure. Action necessary to deal with huge backlog of unpaid cash calls which Buhari adm. inherited and also to incentivise much needed fresh investments in the oil & gas sector.”
Kachikwu’s letter to the President in which he alleged gross insubordination by the Group Managing Director of the Nigerian National Petroleum Corporation(NNPC) Maikanti Baru, was leaked to the media last week.
He had alleged that Baru using the NNPC awarded $25 billion contract without following due process.
He had also alleged that the $25 billion contract was struck without consulting the office of the Minister of State for Petroleum Resources or the board of the corporation.
Baru has earlier in the week responded to Kachikwu’s allegations of lack of adherence to due process in the award of NNPC contracts.
He had said in a statement that the allegations were baseless and due process was followed in all of its activities.
On the allegations by the minister that major contracts were never reviewed or discussed by the NNPC Board, Baru said that the law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.
“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.
“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,” the statement said.
It stated further: “It should be noted that for both the Crude Term Contract and the Direct Sale and Direct Purchase (DSDP) agreements, there are no specific values attached to each transaction to warrant the values of $10 billion and $5 billion respectively placed on them in the claim of Dr. Kachikwu.
“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 short-listing 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.”
NNPC said Kachikwu was expressly consulted by the GMD and his recommendations were taken contrary to the assertion that he was never involved in the 2017/2018 contracting process for the crude oil.