NNPC Didn’t Award $25bn Contracts, Says Presidency

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  • NNPC Didn’t Award $25bn Contracts, Says Presidency

The Presidency on Sunday said there was no truth in the media reports that the Nigerian National Petroleum Corporation awarded contracts worth $25bn.

The Senior Special Assistant to the Vice President on Media and Publicity, Mr. Laolu Akande, made the clarification in a statement made available to journalists, adding that the same amount was not missing from the corporation’s account.

Akande said no contracts were procured by the NNPC based on the leaked petition of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, to President Muhammadu Buhari, contrary to the impressions being created in the past few weeks.

He said a closer look at each of the said projects would show that they were not “procurement contracts.”

He said, “When you look diligently at the referenced projects/transactions one by one, you will see, as the NNPC has shown, that none of them was actually a procurement contract.

“Take the Crude Term Contract and the Direct Sale-Direct Purchase agreements, for instance, these are not procurement contracts involving the expenditure of public funds.

“Both transactions are simply a shortlist process, in which prospective off-takers of crude oil and suppliers of petroleum are selected under agreed terms, and in accordance with due process.

“It is therefore wrong and misleading to refer to them as though they are contracts involving the expenditure of the NNPC funds, or public funds of any sort.

“As you now know, the Minister of State for Petroleum Resources himself has in fact clarified that he meant to focus on administrative and governance issues, not raising a red-flag about any fraud – because no fraud exists in this matter.”

Akande also said it was inaccurate to attach $10bn and $5bn value to both transactions, adding that doing so was an arbitrary act that could completely distort the understanding of the situation.

He explained that whenever there was a monetary value on any consignment of crude oil lifted in the country by any firm, the proceeds would go directly to the Federation Account and not to any company.

He recalled that the present administration, in the implementation of the Treasury Single Account, had closed down multiple NNPC accounts in order to promote transparency and probity.

Akande also explained that even in compiling the shortlist for the prospective off-takers of crude oil and suppliers of petroleum under agreed terms, there were public placements of advert in the mass media seeking Expressions of Interest.

He added that bids were publicly opened in the presence of officials of the Nigeria Extractive Industries Transparency Initiative, the Department of Petroleum Resources, the Bureau of Public Procurement, civil society groups and the press while the events were also broadcast live in some cases.

“For the sake of emphasis, let me state clearly that both the Crude Term Contract and the Direct Sale-Direct Purchase agreements are not contracts for any procurement of goods, work or services, and therefore do not involve the use of public funds. Instead, they are simply a shortlist of off-takers.”

He also disclosed that three presidential approvals were given on joint venture financing arrangements, meaning loans to cater for cash call obligations.

One of these, he said, was approved by the President in 2015, and two by the then Acting President (Yemi Osinbajo) in 2017.

Meanwhile, the Ijaw Youth Council on Sunday accused President Muhammadu Buhari-led administration of covering some top government officials including the Group Managing Director of the Nigerian National Petroleum Corporation, Maikanti Baru, in the alleged $25bn NNPC contracts from being probed.

IYC said it was wrong and unacceptable for President Buhari to have ordered the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu and the GMD of the NNPC, Baru, to work together without calling for a thorough investigation into the alleged fraud in the nation’s cash cow.

A statement issued by the National President of the IYC, Mr. Eric Omare, said that the present administration was fond of treating serious national issues, especially those of corruption involving top members of the government, as family affairs.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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