Senate to Probe Baru over $24bn Contract Awards, Insubordination

Maikanti Baru
Dr. Maikanti Kacalla Baru
  •  Industry experts blame Buhari’s retention of oil portfolio for feud between Kachikwu and NNPC boss

Damilola Oyedele and Chineme Okafor in Abuja

Following the dust raised over the letter written by the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, to President Muhammadu Buhari, in which he accused the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, of illicit contract awards to the tune of $24 billion and insubordination, the Senate Wednesday constituted a nine-man ad hoc committee to probe the allegations made against the NNPC boss.

The committee is to be chaired by Aliyu Wamako, while its members include Tayo Alasoadura, Akpan Bassey, Samuel Anyanwu and Ahmed Ogembe.

Others are Chukwuka Utazi, Rose Oko, Baba Garba and Kabir Marafa.
The committee was also mandated to undertake a holistic investigation into the finances of the corporation.
The resolution followed a motion by Senator Anyanwu who called for an investigation into the allegations made by Kachikwu.

The minister in the letter had accused Baru of failing to adhere to due process in the award of several multibillion dollar contracts and of sidelining the board of NNPC, which Kachikwu chairs, in the award of contracts.

Kachikwu further accused Baru of undermining his authority and appointing senior executives of NNPC without his input and board approval.

In his motion, Anyanwu also emphasised the need for the Senate to investigate Baru’s involvement in the alleged corrupt activities of Duke Oil, a component of the NNPC Trading Limited, noting that the company was incorporated in 1989 in Panama and therefore does not pay tax in Nigeria.

He said the company enjoys the massive support of NNPC in crude oil trading in the international market in spite of grappling with the basics of what it was registered to do.

Anyanwu further drew the attention of the Senate to the fact that NNPC Trading Limited is a joint venture subsidiary, which has Duke Oil, Hyson/Carlson (JV), NAP Oil (JV), and West Africa-Gas LTD (JV) as shareholders.

“The Senate is aware that Duke Oil, which was incorporated in Panama in 1989 and does not pay tax in Nigeria, is still grappling with the basics of what it is registered to do in spite of the support from the NNPC,” he said.
“We are aware of the decision by the current GMD to allocate almost all crude oil lifting to Duke Oil; this is in addition to its automatic inclusion in the lifting of crude oil, gas, etc, which will make Duke Oil a money-spinning outfit that is accountable only to NNPC,” the lawmaker added.

Anyanwu, speaking further, said Duke Oil is the sole importer of diesel for the Pipelines and Petroleum Marketing Company (PPMC) and NNPC Retail – both wholly owned NNPC subsidiaries – but the company (Duke Oil) executes the contracts through third parties since it cannot import the product by itself.
This, the lawmaker added, had impeded the growth of indigenous companies who are trying to make inroads into the sector.
“The Senate is 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.

“We are 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.
“The Senate is concerned that this relationship has helped to greatly stifle the growth of indigenous companies operating in the sector. Duke Oil lacks the requisite credentials to trade internationally; it therefore makes Duke Oil a giant commissioned agent only.

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

“The Senate is further concerned that money so far earned by NNPC Trading Limited through its subsidiaries such as Duke Oil is not made public and is only known by NNPC officials,” Anyanwu said.
Contributing to the motion, Senator Yusuf Abubakar Yusuf noted that NNPC has always acted like it is a law onto itself and was not accountable to any authority.

“NNPC for the past 10 to 15 years has lived above everybody in this country. They think they are a government to themselves and we have to take the bull by the horn. Since we want to fight corruption, we must fight corruption in its totality. And I suggest we include comprehensive investigation of NNPC,” he said.

The Chairman of the Committee on Petroleum (Downstream), Senator Kabiru Marafa, further noted that the Senate could not afford to gloss over the issues raised in the leaked memo.

Presiding, Senate President Bukola Saraki urged the committee to ensure its investigation is thorough.
“This committee should take these issues seriously. They are matters that really go to the root of what we have committed to Nigerians, which is stamping out corruption.

“And they must be investigated and the reports brought back to us as soon as possible. We hope that the quality of the report will continue to meet the standards we have set in this 8th Senate,” Saraki said.

In addition to the Senate’s reaction to Kachikwu’s memo, oil industry experts Wednesday blamed the feud between the minister and Baru on the ambiguity in the line of authority created by Buhari’s retention of the petroleum ministry portfolio.

When he inaugurated his cabinet in November 2015, Buhari retained the post of Minister of Petroleum Resources, while naming Kachikwu minister of state and chairman of the NNPC board.

However, experts who spoke to THISDAY on Kachikwu’s memo said that the development had led to uncertainty over who was actually in control and is the approving authority in the ministry and the industry at large.
Some of the experts who spoke to THISDAY, albeit off the record, warned that the development could impede the reforms initiated in the oil and gas sector by the government.

They equally noted that the credibility of the government was at stake before the international investment community which it has constantly tried to convince that transparency and due process are at the heart of its reforms in the country’s oil sector.

A former President of the Nigerian Association for Energy Economics (NAEE) and professor of energy at the University of Ibadan, Prof. Adeola Adenikinju, said over the phone that Kachikwu’s memo to Buhari projected a big division not just between the ministry and NNPC but also within the ministry which the president needs to quickly address.

Adenikinju opined that if Baru was guilty of the allegations levelled against him by Kachikwu in the letter, then it would be appropriate for Buhari to clearly define the line of authority to prevent such divisions in the future.
“This shows that there is a big division in the ministry, and that the line of authority is not very clear, which perhaps makes the GMD go to the president and not the board.

“The president has to clear this uncertainty because investors will obviously run away if they find that they don’t know where the locus of power is, or who is clearly in charge,” said Adenikinju.

He added: “I think that what the minister is calling for and which he stated in his letter was that the board has its responsibilities, and that it should be respected.

“But without looking at the board or going straight to the president for approvals means that there is no clear delineation of authority,” he pointed out.

  • Toby

    When Buhari and his family steal through Baru, it is not corruption.

  • henry price

    comrades let us not over look best condition at this moment about this seemingly matter of corruption is that it is uncovered before if is facilitated plus ill gotten funds hidden beyond government ability to retrieve in some foreign bank account. Slowly but surely Nigeria appear to be making progressive steps in a direction in best interest of people of Nigeria. We will keep watching for final determination hoping it is timely plus justice prevail without special consideration to anyone. Very much sincere, Henry Price Jr. aka Obediah Buntu Il-Khan aka Kankan aka Gue

  • Michael Kadiri SocioPolitical

    Ibe’s whistle blowing against a government in which he remains a member is interesting.

    I think he will soon discover that when the government encouraged whistle blowing and even offered financial rewards, they did not mean blow the whistle against your own side – rather they meant blow the whistle against the opposition.

    Like everything Nigeria, this may not end well for Ibe. He may loose his job – which I bet will be hurtful to him, because rare is the Nigerian who tastes the perks of high office in Nigeria where personal enrichment of grand proportions is the norm and choses to walk away because the ‘enjoyment’ is too much?

    He may become even more ostracized by a Presidency that never says sorry and cannot calibrate to improve. Ibe strangely and perhaps because of his background working in global corporate does not appear to understand that government appointments especially in the O and G sector is not about merit, these are all political appointments in which the occupants first responsibility is to remit money back to the coffers of the ruling party which is all Deziani was very good at. IN the process, you are allowed to personally ‘do well’ and Dezani is only being hounded because the ruling party lost and every government needs a poster boy (in this case – girl) for corruption.

    Buhari did not respond to the letter because he is ‘surprised’ that a clever boy like Ibe did not know this – just like Diana did not know that Charles as future king was always expected to have a concubine – just as she was busy playing love, is Ibe busy playing love of country?

    What will happen next?

    He will be spoken to. Rather very sternly. He will be shown evidence of where he too has been licking this most delicious black soup and reminded that if he wants more soup he should ask politely and stop shouting at the dinner table. That he should be under no illusion that the GMD is his boss and not the other way round – and that he should forget titles and be a good team player.

    Sometimes within Nigeria’s public space – an appointee goes rouge and starts to attempt to become clean and act right. Why this happens must be studied by psychologists. Maybe these outbursts is God’s way of prodding us that as Charlie Boy says “our mumu don do” – I fear that this phrase from Charlie should not have been a definite, but a question – our mumu don do?

    I think the answer will be ‘check later – e be like say e never do’!

    • Troy

      I like your opinion very much. You have put it so aptly. Well done. This is brilliant. He that has ear let him hear!

    • Milito

      Your response and contribution is the most pragmatic of all here on this topic. God bless you . This is precisely one of the reasons why the north doesn’t want restructuring or secession of the South . Its all about OIL !

  • forestgee

    The body language of fighting corruption is fading. It is clear that we do not have Saints in this government. PMB is the Minister of Petroleum and his Chief of Staff is on the Board of NNPC; and this is happening. Diezani Alison-Madueke may, in the end, be out-stolen by the present caretakers of NNPC!

    • The Rt. or Lft. Hon NinjaK

      hahahahahah hohohohohoho hehehehehehehehehe Sai Babaaaaaaaaa!

  • EBI

    I think Mr President should abdicate his position. He has no business duplicating roles : one of which he does not manage himself, hereby causing problem as to lines of authority between Baru and Kachukwu. I also think Buhari should be held responsible for encouraging such insurbodination. How would he have felt if a low ranking officer usurp his authority when he was General. I think Baru should take orders from Kachukwu who a Minister.

    • Enyi

      Asking Buhari abdicate from such or blaming him will not help matters here, owing to the diezani looting, you cannot blame Buhari who believes that supervising the ministry will to an extent check the level of corrupt practices in the oil industry.

      Now, all that remains is for Buhari to probe the matter as well as call the guilty party to order!

      • JOHN

        The present system is breeding worst corruption where Baru is instigated to jetison NNPC board and singlehandedly award contract to the tune of over 24 billion dollars without due process. The present system stinks of putrefying corruption.

        • Mr Abel Ighodaro

          Welcome Nigeria 2017.

      • EBI

        There is no way we are going exonorate Buhari. He is the President and Minister of Petrolium so called. He should have a clear definition of authority and hierachy of those under him without causing chaos. Secondly, my prayer is Mr President should not be embroild in the on going issues – his good name is stake. Like one of our contributor has mentioned. There is no way those contracts and appointments would have been without ‘ the direct or indirect backing of the President’. Panama is tax haven. The globally currupt Politians and business men in shady deals take and hide syphoned money there. I hope Buhari and his cohorts are not in this practice already and preaching anticurruption to us. Are you telling me Mr President did not know there is such a company as Duke Oil with Panama link. That the same company does not pay tax in Nigeria? With all the company earns? Do not know billion of monies that would have accrude to Nigeria by such tax evation? Then he is not fit to be a president. That he is being by passed a Group Manager to do all these deal. What is the difference between him and former President Jonathan who does not have a knowledge of the stolen monies ment to buy weapon against Boko Haram.It not only Baru that they should question . THEY SHOULD QUESTION Mr President, Kachikwu – all have questions to answer. The Senate should act swifly before they sink Nigeria further. Thirdly, Buhari position as Minister is strategic for the CoreNorth. Push the Southerners aside in key postion and implant CoreNortherners. This way more oil wells can be stolen from Southern people. Buhari has a question to answer!

      • Elenugboro

        Bros go and read the letter now.

  • Sarah

    It is inconceivable that Baru singlehandedly awarded $24bn contacts without backing from the President, directly or indirectly through the Chief of Staff.
    We have had similar issues of apparent insubordination since the inception of PMB’s government. First it was Gov El-Rufai insulting the Vice President. Then there was the apparent turf war between Hadi Sirika and Rotimi Amaechi, followed by the one between executive director of NHIS and Health Minister.
    I do not regret that we got rid of Jonathan’s government in 2015. However I regret that the general population was not able to choose between Atiku and Buhari.
    Thankfully 2019 is around the corner and it is hoped that Atiku will place himself in a party that will present him to the general electorate at that time.

    • Enyi

      So Buhari too also encouraged the insults on Osibanjo, Amaechi and Oyewole??? Haba! Abeg borrow sense na

      • Tony Ezeifedi

        Have you heard of body language? A lot of insubordinations had gone on in different ministries at different times and Buhari did nothing and said nothing. So it continues. Minister of justice came out to counter publicly what Acting President (not Vice President) said and nothing happened. So it goes on. I only blame some captives and cowards who are so frightened to speak.

      • austin

        Why are you so keen to absolve Buhari when things are going south? From all indications Buhari’s only tasks and targets is to stay alive. Every other persons can take any other responsibility. The buck does not stop at his table. He probably does not have a table.
        E be like na to borrow some sense from Sarah o.

    • Ehi Ehinomhen

      You have every right to continue in self delusion that PMB was a better candidate in 2015 despite the atrocious and abysmal performance of the present administration so far. Just leave GEJ out of this.

    • Drake Solo

      You are still wallowing in Tomfoolery to compare GEJ and Buhari, the illness that afflicted you in 2015 is still with you.

    • ychukwuka

      When a man sells a dog and use the proceed to buy a monkey, what squats is still in his house (Igbo Proverb). You want to replace a 74 year old ‘Saint’ Buhari with a 70 year old Atiku (both will turn 71 and 75 before the year expires)? Where I come from, it’s not wise and almost a BIG insult to explain a proverb to an adult hence I’ll not expatiate on it. Good luck though!

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  • Elenugboro

    The NNPC can never be transparent in its financial dealings. It is an open secret that the opaque oil company is a ready source of slush funds for subsequent administrations, this one cannot be different as we are currently observing. All the foregoing brouhaha cannot be divorced from the 2019 elections in the horizon. Kachikwu simply doesnt want to be labelled the next Diezani, hence the outcry. These are interesting times indeed.

    • Tony Ezeifedi

      Correct, bros.