Putting Aside Public Spat, Kachikwu, Baru Chart Way Forward for Oil Sector

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• Osinbajo: FG considering proposal to support local goods

Ndubuisi Francis in Abuja

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, Tuesday put aside their differences, even if temporarily, and discussed opportunities in the Nigerian petroleum industry and ways to grow the sector.

In a leaked letter to President Muhammadu Buhari, Kachikwu had listed a litany of procedural breaches against Baru, accusing the latter of not only undermining his position as the chairman of the NNPC board but also of awarding contracts totalling $26 billion without recourse to due process.
In response to Kachikwu’s allegations, Baru had said there was no law that stipulates that he should seek the approval of the minister in awarding contracts.

The public spat between the two top officials of the government was however punctuated, even if temporarily at the 23rd Nigeria Economic Summit (NES) 2017 in Abuja Tuesday.
Both men were discussants at the Energy Policy Committee breakout session.
Baru, a lead discussant at one of the sessions, came first to the venue of the programme, while Kachikwu walked in about 15 minutes later.

As soon as Kachikwu arrived, Baru stood up, approached him and exchanged pleasantries.
Kachikwu also offered that he should be represented at the second session of the dialogue by Baru, a request the organisers politely declined because Baru was to chair a session and it would have affected his participation.

However, Kachikwu left before the end of the session and Baru represented him. But the minister returned and joined Baru in chairing the event. After the session, both men engaged in a brief chat before departing.
Kachikwu, who moderated the panel discussion on energy with Baru, said the federal government would develop policies that would ensure that the global decline in fossil energy does not take Nigeria unawares, adding that government was already thinking towards that direction.

He, however, said the federal government was currently dealing with the fundamentals of ensuring that the refineries work and ensure availability of energy sources to meet day-to-day energy needs.
Kachikwu said: “The first thing is to develop the policies and to do that the NNPC would have to take over the commercial aspects because they are going to be the one deploying it.

“As the refineries get kitted up, obviously we would continue to look at new fossils development programmes and will see a need to pump out policies that would enable Nigerians to see the advantages in terms of costs.”
Commenting on the issues raised by the panelists on the upcoming marginal field bid round, Kachikwu said the government was determined to ensure transparency in the bid process so that the public could monitor the process and would know who gets what.

“These are some of the issues the Niger Delta communities are always enquiring about and indeed all Nigerians. The more transparent it is (bid process), the better for us.
“Another key question is regarding ensuring that the local communities in the Niger Delta are carried along.
“We are developing models to ensure better regulations geared towards transparency in the bid process and we would alert Mr. President as soon as we are done,” he explained.

In his opening remarks, Baru expressed concern that only nine out of the 14 firms that won previous bid rounds for the marginal fields were operating, noting that it was not a good development.
In his response, Kachikwu said the Ministry of Petroleum Resources would work closely towards ensuring that concerns and constraints that had hindered the companies which were yet to commence production from their oil acreages are appropriately addressed.

While declaring the summit open, Vice-President Yemi Osinbajo said one of the critical things that the Manufacturers Association of Nigeria (MAN) had proposed to the government in support of the local content initiative was what they have described as margins of preference for locally made goods.
“In other words, what they are saying is if you prefer locally made goods, then you must take care of the problems that local goods have; in other words, they are usually more expensive than the imported goods, so you have to take care of that by what they call margins of preference.

“So we are looking at that proposal and we are looking at the percentage for procurement purposes. But we do agree with the principle that if we are going to promote local goods then we must find ways of preferring them to imported ones and we think that the margins of preference are the sensible way to do so,” he said.

Osinbajo noted that while the federal government was determined to build a modern economy, its ability to do so was hamstrung by the fact that its annual budgeted expenditure of N7 trillion was only a small part of a multi-trillion naira economy.
“The private sector is clearly the bigger contributor to the economy. It thus follows that the private sector must be enabled and encouraged to play a decisive role if our development efforts are to succeed,” he stated.

According to him, the economy has now returned to the path of growth after the precipitous slide from 2014, adding: “As it’s now well known, we exited the recession in the second quarter of 2017 with a GDP growth rate of 0.55 per cent, while inflation has similarly declined continuously from its peak of about 18 per cent in January 2017 to about 16 per cent today.”
He also noted that last year, there were concerns about the availability of foreign exchange and a rapidly deteriorating exchange rate, noting that the situation has been turned around and stabilised.

Osinbajo noted that foreign exchange reserves has risen to about $33 billion and end users have increased access to foreign exchange partly due mainly to increased export earnings and remittances as well as the introduction of a dedicated transparent window for investors and exporters (NAFEX).

He said: “The results have been encouraging as the inflows of capital in the second quarter of 2017 of about $1.8 billion were almost double the amount of $908 million imported in the first quarter of the year.

“Third, another issue of great concern last year that has been resolved was the loss of a significant amount of oil production. At some stage last year, we were losing up to one million barrels a day of crude oil but thanks to the series of engagement we had with stakeholders in the Niger Delta on the new vision for that region, production has been restored to nearly 2 million barrels per day.”
The vice-president, however, pointed out that government was concerned about the very high interest rates, tracing it to government borrowing.

He added that since evidence pointed to a crowding out of the private sector, the federal government was reducing its demand for domestic paper and would seek to refinance maturing domestic debt with longer tenor and cheaper external borrowing.
Earlier in a panel discussion, Osinbajo alongside the Chairman of United Bank for Africa (UBA) Plc, Mr. Tony Elumelu, and an executive of General Electric (GE), Mr. John Price, had assured them that government was determined to address the nation’s socio-economic challenges.

He stated that attention was being refocused from resource-dependency to productivity.
In his opening address, the Chairman of the Board of Directors of the Nigeria Economic Summit Group (NESG), Kyari Bukar, said that at the last summit, the NESG had called for a more pragmatic engagement of the Niger Delta region by the federal government to address the frequent disruption to oil production linked to the vandalism of production and transportation infrastructure.
Kyari said: “We are pleased to note the impact of the engagement of the government and the resultant impact on the broader economy.

“However, growth in the non-oil economy remains low. Nevertheless, we note that the action led by the Central Bank of Nigeria to stabilise the exchange rate and increase dollar supply to the economy also meant that many industries in the non-oil sector were able to turn the corner after a very difficult 2016.
“While the steps taken have been positive for the economy, it is important to note that the cost and supply of dollars remain a challenge for many businesses.

“These and other challenges continue to make Nigeria a tough place to do business. We therefore emphasise again that policy and institutional reforms must continue if we are to realise the potential of the economy.”
Also in his address, the Minister of Budget and National Planning, Senator Udoma Udo Udoma, said the Economic Recovery and Growth Plan (ERGP) of the federal government included the concept of ‘Made in Nigeria’ goods, which is the theme of this year’s summit, noting that it was more than this.

According to him, “It sets out our comprehensive strategy for increasing our national productivity and output, in order to achieve our objective of a prosperous economy providing maximum welfare for all our citizens.
“Our aim simply put, is to achieve a growth rate of 7 per cent by the year 2020, and thereafter continue on a growth trajectory that could reach up to 10 per cent in the succeeding years.
“If sustained, there is no reason why Nigeria cannot become a regional industrial and commercial powerhouse.”

  • Milito

    Gentlemen , let me bring an update on this Barugate ! Osibanjo just admitted approving part of the contract (N640billon) while PMB was on medical leave. That admittance to me is quite diversionary, irresponsible and hypocritical ! It is designed to diffuse the steam and divert attention from the principal culprits.

    So the question begging for answers include (a) does Osibanjo’s admittance foreclose the fact that due process was not followed? Was the approval presented to him by Kachikwu or Baru ? If it was by Baru, why did he sign it without the advise or input of the chairman of the board and the minister of state who incidentally is also a member of the executive ? (b) who approved the remaining part of the $25billion oil contract ? Was it the signed by the sick president? Who took it to him in U.K – Baru or Kachikwu or the Cabal (Abba Kyari) ? Was the president in a right frame of mind to vet and sign such a whopping amount of contract while sick without seeking the input of his chief advisor/deputy on petroleum matters which is Kachikwu himself? (c) why did Baru failed to explain the allegations on the issue of appointments in NNPC without the board approval?

    Only God and time will expose how many of such humongous contracts could have been surreptitiously signed under the period PMB was frigid and away. This public maturity exhibited by these actors are nothing but a function of some clandestine intervention by the cabals and because all parties involved know what is at stake, they have no choice than to ‘maintain’ or else be ‘contained’

    Game of thrones continues…

  • josvinco

    NUPENG and PENGASSAN executives jumped the gate by going to the press to offer their supports when they should have been watching as the trend of events unfold before doing anything. They belong to the class of “socio-political gluttons” whose personal interests only matter to them. Our nation cannot move forward in this way with this type of people. When have they spoken or offer solutions to ease the gridlock on the Apapa expressway leading to our nation’s busiest port ? Instead they form part of the problem .

  • vic

    BUHARI IS A PARTY TO THIS $25 BILLION CONTRACT FRAUD. HE CANNOT PLEAD IGNORANCE OF THIS. BUHARI USED BARU TO DEFRAUD THE NATION OF $25 BILLION.

    BUHARI IS A MEGA THIEF.

  • vic

    NO DIVERSIONS AND SWEET TALK.

    THERE SHOULD BE THOROUGH INVESTIGATION INTO THE $25 BILLION FRAUD WITHIN THE NNPC WITH THE HIDDEN BLESSING OF, OIL MINISTER, BUHARI.

    BUHARI HAS BEEN CAUGHT RED HANDED WITH HIS PANTS DOWN.

    BUHARI HAS PROVEN TO BE THE MEGA THIEF OF NIGERIA.

  • Marcus Ijele

    There is no way this could have happened without a grave compromise. It is either Kachikwu lied and fears reprisal, or that Buhari and Baru Barau actually connived to steal twenty five Billion Dollars through frivolous contractual awards, and Kachikwu got a promise to shut up and be rewarded. Or that certain bad deals by Kachikwu might have known by Barau Baru, and it becomes scratch my back, I scratch yours.

  • Ola

    Putting the differences aside and finding a way forward is good. However, there are some questions the presidency needs to clarify for Nigerians:

    (1). What will happen to the $26 billion contracts awarded without following proper procedures?

    (2). Bearing in mind that the post of “Minister for state” is a post without portfolio. Is the President ready to quit his position as Minister of Petroleum and make Kachikwu the Minister of Petroleum?

    (3). The Minister of state post is completely unnecessary, a duplication, creates confusion and a drain on our budgets. Would the presidency consider scrapping this post across the ministries for good?

    (4). The chain of command within ministries and parastatals needs to be clearly spelt out to avoid confusion and unpatriotic attitude aimed at enriching individuals who seek positions to enrich themselves.

    Until the above is addressed, this situation will repeat itself – it’s just a matter of time.

    • Curious One

      You nailed it

    • Troy

      Especially as regards your first question , the contracts were not personal properties of neither of the protagonists. There must be an enquiry into the beneficiaries of the those contracts. There are insinuations in some quarters that some of the companies belong to some of the principal actors. Could that be true. The parties including Mr. Presidentneed to come out clean for the sake of the public trust reposed on them. This cannot be swept under the carpet like a personal sqauable if we are still fighting corruption.

    • Ajibade Stephen Adegbite

      Remember that “not following proper procedure” is still an allegation by Kachikwu, which Baru and NNPC has defended. It is yet to be ascertained who is right or wrong. Govt will have to clear that area and make it public. Until then, its all allegations and repudiation.

  • Omooba Adekunle Orafidiya

    Regardless of what the case is, the maturity displayed by Kachikwu and Baru is admirable.

  • Cheta God

    Sai Baba. Matters are easily swept under the carpet

    • Marcus Ijele

      When APC, members are involved. Where is the report on SGF? Let 2019 come,though some suffering and smiling gullible will still say ,”Buhari is the best, even they could not get a job of at least fifty thousand Naira a month under Buhari regime.

  • The Rt. or Lft. Hon NinjaK

    Like Master, like servants!