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Tag: Group Managing Director (GMD)

  • Fuel scarcity: Senate summons NNPC GMD

    Fuel scarcity: Senate summons NNPC GMD

    Senate Committee on Petroleum Resources Tuesday invited the Group Managing Director (GMD), Nigeria National Petroleum Corporation (NNPC) Maikanti Baru to throw light on the fear of fuel scarcity in the country.

    The committee also said that it has concluded arrangements to begin nationwide inspection of filling stations following fears of possible fuel scarcity in the country.

    Chairman of the Committee, Senator Kabiru Marafa, stated this while briefing journalists shortly after an investigative hearing on the issues.

    The Zamfara Central lawmaker noted that the Senate would not watch some unpatriotic persons put Nigerians through any form of hardship, particularly given the yuletide period.

    He said that though the Senate had adjourned to begin budget defence, members of the committee would take time out to go on the oversight.

    He added that members of the committee will be divided into subcommittees to make it possible for them to visit all the states of the federation.

    Marafa said, “First thing first. The welfare of Nigerians especially in this season is that a lot of them will be travelling to reunite with their love ones is paramount.

    “We will take time out to embark on a serious oversight. We will break into sub-committees to be able to cover the entire country.

    “We have already mandated the Nigeria National Petroleum Corporation (NNPC) to furnish us with the daily distribution.

    “This is to enable the sub-committees to be armed with detailed evidence of which filling station was given what quantity of fuel.

    “We will also get these details from the filling stations to ascertain when last they got supplies and the quantity sold.

    “We will not stop at that. We will also inspect tanks in filling stations to ensure that Nigerians are not taken advantage of.’’

    The committee has summoned the Group Managing Director of NNPC, Maikanti Baru, to appear before it on Thursday, Dec. 7, having failed to appear before it on Tuesday.

    “Immediately the issue came up, we contacted NNPC to know the situation of things and we were told that the rumours were unfounded and that they have written rejoinders to that effect.

    “However, given the seriousness of the matter, we decided to invite the GMD to come brief us on the development and to enable Nigerians know the situation of things.

    “Unfortunately he wrote informing us of his inability to honour the invitation.

    “We hope he will be back by Thursday to tell Nigerians the true situation. Even if he cannot make it he can send people that are in good authority to speak on his behalf.

    “There is an Executive Director in charge of Downstream who oversees the downstream generally. There is also the Managing Director   of Petroleum and Product Marketing Company.

    “So, whatever it is by next tomorrow we will be able to tell Nigerians what the situation is like and what the Senate is going to do in the event of any eventuality.’’

    The Committee chairman warned filling stations in the habit of hoarding fuel to inflict untold pains on Nigerians to desist as it would not be business as usual.

    Marafa assured that the Senate would work with relevant agencies of government to severely punish any filling station found wanting.

    He said, “By yesterday night all relevant agencies were given a marching order by phone president to get into town to ensure that any filling station that hoards fuel will be appropriately dwelt with.

    `The NNPC has also been directed to look at their supply chain and inform the relevant agencies of their supplies to various stations while they work with that plan to see that anybody found hoarding the product will be sanctioned.

    “We will take appropriate measures also as a committee to ensure that any marketer found wanting would be dealt with,’’ he said.

    Marafa also assured Nigerians that the Senate would do everything possible to break the jinx of unnecessary fuel scarcity in the country during festivities.

    Nigerians, he said, should avoid panic buying and go about their daily activities.

  • $25bn contract: Senate postpones probe of NNPC GMD

    $25bn contract: Senate postpones probe of NNPC GMD

    The Senate Tuesday postponed the planned probe of the Group Managing Director (GMD), Nigeria National Petroleum Corporation (NNPC), Dr. Maikanti Baru, over alleged award of $25 billion contract without due process.

    The upper chamber also resolved to investigate Baru over alleged insubordination and abuse of office as contained in the Minister of State, Petroleum Resources, Mr. Emmanuel Ibe Kachikwu leaked letter to President Muhammadu Buhari.

    Deputy Senate President, Senator Ike Ekweremadu who announced the postponement, said that the investigation will now commence next Tuesday.

    The investigative panel to be chaired by Senator Aliyu Wamakko ought to have started Tuesday.

    Ekweremadu who presided over the plenary did not give any reason for the sudden postponement.

    Sources said that the court case praying the court to stop the Senate from conducting the investigation might have been the reason for the shift.

    Senate President, Abubakar Bukola Saraki constituted the adhoc panel last week following a resolution of the Senate and public outcry over the award of the alleged shady contract.

    The committee was given four weeks to submit its report.

    A source said that earlier meeting scheduled last week by the chairman, Wammako, was also called off at the last minute.

    Wamakko is yet to address the press about the modalities his committee would adopt to conduct the investigation.

    Kachikwu’s letter, addressed to President Buhari was leaked to the press last two weeks.

    In the memo, Kachikwu alleged lack of due process in the award of contract valued at over $25 billion by NNPC.

    In the August 30, 2017 letter, Kachikwu attributed the slow growth in the oil and gas sector to illegal practices by the departments and agencies under his ministry, especially the Nigerian National Petroleum Corporation (NNPC) headed by the GMD of Baru.

    He told President Buhari that the country’s petroleum industry would have recorded tremendous progress, but for Baru’s alleged inaction.

    Kachikwu who also presented five prayers to the President to save the oil sector from collapse, said he was always being blocked from seeing the President. He said he was disturbed that $25 billion contracts were awarded by Baru without his input and that of the board.

  • Award of contract: Baru violates NNPC Act, says Falana

    Award of contract: Baru violates NNPC Act, says Falana

    Activist lawyer, Femi Falana (SAN) has said that the defence of the Group Managing Director (GMD), Dr. Maikanti Baru that he has powers to award contracts to the exclusion of the Minister of State in the Ministry of Petroleum Resources and the board of the Nigerian National Petroleum Corporation (NNPC) is illegal and violates the NNPC Act.

    Falana contended that the defence of Dr. Baru failed to take cognizance of the provision of section 6 (c) of the NNPC Act which has vested the Board of the NNPC with the exclusive power to”enter into contracts or partnerships with any company, firm or person which in the opinion of the Corporation will facilitate the discharge of the said duties under this Act.”

    Falana stated this in a statement issued in Lagos Wednesday titled, “NNPC operates outside the law” in reaction to the on-going face-off between the minister and the GMD of the corporation, Dr. Maikanti Baru over the unilateral award of $25 billion contracts contract awards by the latter.

    The lawyer also noted that Dr. Baru failed to respond to the unilateral appointments of key staff in the NNPC without the approval of the Board of Directors pointing out that since this particular allegation was not denied, it is reasonable to conclude that it is admitted by the NNPC management, even though the appointments in question were made in utter violation of the Federal Character Commission Act.

    Notwithstanding the report that the presidency has thrown its weight behind the NNPC GMD in the face off with the Minster of State in the Petroleum Ministry, Falana stressed the need to review the matter within the ambit of the law.

    On the management of the NNPC and contract awards, Falana further argued, “for the avoidance of doubt, section 1 (2) of the NNPC Act states that the affairs of the Corporation shall be conducted by the Board of Directors of the Corporation. Since it is conceded by Dr. Baru that some contracts are subject to the approval of either the Board or the Federal Executive Council he is yet to inform the Nigerian people who approved the $25 billion contracts.

    “It is pertinent to state, without any fear of contradiction that by virtue of section 3 of the NNPC Act the GMD as the chief executive of the Corporation shall be responsible for the execution of the policy of the Corporation and the day to day running of the Corporation’s activities and its associated services. But contrary to the erroneous impression conveyed by the management of the NNPC there is no conflict whatsoever between the provisions of the NNPC Act and the Public Procurement Act, 2007 to justify the usurpation of the powers of the NNPC Board by the Tenders Board of the NNPC headed by the GMD. Therefore, the unilateral award of multi-billion dollar contracts in the NNPC by Dr. Baru or the Tenders Board is illegal, null and void in every material particular.

    “With respect, the totality of Dr. Baru’s defence was anchored on the mistaken belief that the NNPC Act does not require him to report to the Minister of State but to President Buhari in his capacity as the Minister of Petroleum Resources.

    “Dr. Baru must have forgotten that upon the removal of Dr. Kachikwu as the NNPC GMD in 2016, the President appointed him as the Chairman of the reconstituted Board of the NNPC in line with section 3 of the NNPC Act. Therefore, the decision of Dr. Baru to by-pass the Chairman of the Board in the award of the contracts and appointment of NNPC staff cannot be justified either under the NNPC Act”.

    Falana contended, “Since Dr. Kachukwu was not removed as the Chairman of the Board, the President ought not to have encouraged Dr. Baru to treat him and with such pompous disdain and arrogance”.

    He argued that the impression given by Dr Baru that once the President was briefed with respect to the award of the contracts, that due process has been observed in the award of the $25 billion contracts in line with the PPA was misleading.

    He maintained that such position is neither backed by the NNPC Act nor the PPA. He said the competent authorities that have the final say in the award of  contracts and disposal of public assets under the current political dispensation are the Bureau of Public Procurement (BPP) and National Council of Public Procurement (NCPP).

    “The NCPP is not chaired by the President but by the Minister of Finance. The other members of the NCPP include some officials of the federal government and representatives of relevant professional bodies and civil society organizations.

    “Apart from constituting the NCPP and the BPP   the President has not been empowered to approve any contract whatsoever. In fact, there is no reference whatsoever to the Federal Executive Council in the entirety of 61 sections of the PPA. To that extent, the FEC presided over by the President cannot approve the award of contracts which is the exclusive duty of the NCPP and BPP.

    “Although the PPA was enacted in 2007 the President or the Federal Executive Council (FEC) has  been approving multi-billion dollar or naira contracts, albeit illegally.

    The activist lamented that the Buhari administration which has loudly undertaken to fight corruption has ignored calls from many civil society organizations to set up the NCPP.

    He said since neither the President nor the Federal Executive Council is competent  to approve the award of contracts under the PPA the claim of the NNPC GMD that the controversial contracts were approved by the President cannot be justified under the PPA.

    To avoid a situation whereby the $25 billion contracts and others being awarded by the Buhari administration are annulled and set aside on the grounds that they were awarded by either the President or the FEC without any legal authority, Falana counseled President Buhari to constitute the NCPP without any further delay.

    “If this call is ignored, once again, the civil society anti-corruption bodies ought to approach the Federal High Court for a writ of mandamus to compel the President to inaugurate the NCPP”, he said.

    He also noted that apart from breaching the NNPC Act and PPA, the NNPC has conveniently ignored the National Extractive Industries Transparency Initiative Act and has refused to comply with the directive of the NEITI to remit $21.7 billion and N376 billion illegally withheld from the Federation Account.

    Though Dr. Kachukwu recently disclosed that the nation had lost $60 billion due,  he noted that the NNPC has refused  to recover same by implementing the provisions of the Deep Offshore and Inland Basin Production Sharing Contracts Act and instead of directing the NNPC to recover and remit the huge fund  to the Federation Account the Federal Government is busy piling up external loans.

    He also noted that the NNPC does not subject its budgets to the National Assembly for appropriation as stipulated by the Constitution and the Fiscal Responsibility Act.

    H recalled that shortly before proceeding on its annual vacation, the Senate disclosed that the NNPC and 33 other agencies of the federal government had failed to submit their 2017 budget to the National Assembly but that the NNPC management ignored the disclosure knowing that the Senate would not pursue the matter.

    Falana contended that  Dr. Ibe Kachukwu owe it a duty to the country to react to the allegation of the management of the Nigerian National Petroleum Corporation (NNPC) that he engaged in the unilateral award of multi -billion dollar contracts during his tenure as Group Managing Director (GMD).

    He remarked that even if the allegation of the NNPC GMD against the minister is true,  it cannot justify what he described as the reckless impunity that has characterized the management of the affairs of the NNPC since 1999.

    He contended however that the allegations and counter-allegations of Dr. Kachukwu and Dr. Baru over contract awards have reinforced his earlier call on President Mohammadu Buhari to relinquish the post of the Minister of Petroleum Resources and appoint a full-fledged Minister to run and coordinate the affairs on the oil and gas industry in strict compliance with the law.

    He reiterated that the board of the NNPC should also be reconstituted by reducing its present membership from nine back to sixpersons as provided for by section 1(2) of the NNPC Act.

  • How NPDC lost $36m in five years – Group

    How NPDC lost $36m in five years – Group

    A non-governmental anti-corruption group, Youth Coalition for Change (YCC), has petitioned the Group Managing Director (GMD), Nigeria National Petroleum Corporation (NNPC), Dr. Maikanti Baru, over alleged loss of over $36 million by the National Petroleum Development Company (NPDC) through faulty procurement process.

    The group claimed it estimated that the faulty procurement process which makes the NPDC lose not less $20,000 a day, would have cost the company about $36 million dollars of loss in the past five years.

    National Coordinator of the group, Joe Odudu and National Secretary, Innocent Izoma, who signed the petition dated 10 October, 2016 said that are a duly registered anti-corruption, non-governmental organization working to ensure that President Muhammadu Buhari’s change mantra permeates every government institution and leads to cost saving, eradication of corruption and graft for the good of all Nigerians.

    It claimed that the abuse of the procurement process by NPDC officials has been going on since 2008 when the contract for the procurement of security patrol boats to secure oil facilities was signed.

    The group said, “It is sad to note that one of your subsidiaries, the National Petroleum Development Company (NPDC) with a considerable number of oil assets in its portfolio, has been unable to make its mark in the petroleum sector in spite of its huge assets of several oil blocs, freely ceded to it by the Federal Government.

    “It is in the light of the fore-going that we wish to bring to your notice the monumental rot in the procurement process of NPDC generally and OML 119 in particular, especially the procurement of security patrol boats to secure their off-shore asset.

    “This contract was signed since 2008 without competitive bidding, in contravention of extant Procurement Laws, at the rate of $40,000 per day.

    “The contract was for provision of three (3) patrol boats with one boat on standby while two boats will provide security coverage. But from the onset of the contract, there has not been any stand-by patrol boat.

    “The NPDC has also refused to review or put up this procurement for tender even when oil prices have fallen from over $110 per barrel (which was the price when they initially made the award) to about $40 per barrel. Other oil companies, including TOTAL and SPDC have since cut their procurement costs by over half the price to between $7,000 and $8,000 per patrol boat, equipped with naval personnel and ammunition.

    “NPDC advertised the tender for these boats over two years ago, but some criminal cabal within it has refused to process these tenders in line with the Procurement Act.

    “This has enabled them to continue sharing monies and even boast that they have the management staff of NPDC and some top officials at the NNPC Corporate headquarters in their payroll.

    “We estimate that this faulty procurement process which makes the NPDC lose not less $20,000 a day, would have cost the company about $36 million dollars of loss in the past five years!

    “Most scandalous of all, we hear there is a plan to bring in two more patrol boats to this same OML 119 and position them only a few meters from where the other patrol boats are stationed, to protect a platform that is only 14 kilometers away, to be given to the same bogus contractor.

    “We shall resist any attempt to commit this impending fraud and bring the entire scandal to the attention of Mr. President and EFCC if necessary.

    “Again, we have been informed of another fraud in the short term hire of anchor handling tugs being justified on the basis of emergency procurement.

    “This involves the hire of three to four AHTS vessels and three are permanently stationed at OML 119, without the fulfilling of either the Procurement Act or Local Content Act.

    “This arrangement has been ongoing since January last year on “temporary contracts”, totally against the Procurement Act. And it was similar crimes that led to the prosecution of officials of NIMASA by the EFCC.

    “The NPDC argument is that they don’t want to shut down production, and they are paying between $19,000 and $20,000 every day for the anchor handlers! This a gross violation of the Procurement Act and is tantamount to contract splitting

    “To say the least, such expenditure is much above the market price, and it has cost the NPDC about $7.5 million in excess payments in the past fifteen months. We also wonder why any government agency in this era of CHANGE, will award a temporary contract for fifteen months, with monthly or quarterly extensions.

    “It is totally illegal and in breach of all extant laws in the oil and gas sector and we demand that those behind this act of sabotage be brought to book, and the tender immediately advertised and awarded to competent local contractors.”