President Muhammadu Buhari met with the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, for one hour at the Presidential Villa yesterday, while Vice President Yemi Osinbajo had audience with Baru in a different meeting.
The meeting was the President’s response to the reported dispute between Kachikwu and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, over the latter’s alleged award of $25 billion contracts without deference to the minister.
A top source, who spoke in confidence, said: “The President took time to review all the issues raised in the August 30 memorandum. The points were considered one by one.
“They met for about an hour with the President listening and taking notes.
“And the minister, who used the opportunity to restate his high regard for the President, explained how the GMD had been treating him with disdain over what he wrote in his memo.
“He also said he was not out to sabotage the Federal Government under any guise.”
Findings however revealed that the GMD of NNPC met separately with Vice President Osinbajo.
The source said: “I am aware the GMD also came to have audience with the Vice President.”
There were indications yesterday that President Muhammadu Buhari might invite members of the board of NNPC to a meeting following revelations that they had “intervened” in the crisis of confidence between Kachikwu and Baru some months ago.
It was learnt that the President would find out from the board members if the disagreement over the contracts was actually brought to their notice.
A government source added: “There is no way the President will not hear from the board members. The Minister alleged that he was sidelined and in over one year of Baru’s tenure, no contract has been run through the board.
“The GMD of NNPC is adamant in maintaining that every transaction was reported to the board, whether on or before the inauguration of the board. He has cited minutes of board meetings.
“It is now left to the President to hear from board members on what actually happened.”
A source close to the board of NNPC said: “The truth is that the problem between the Minister and the GMD is mainly ego.
“Kachikwu tried and Baru tried in addressing the rot in the oil sector and NNPC. The gains are visible for all stakeholders in the oil and gas industry.
“In the past few months, we have been intervening in the crisis of confidence between the Minister and the GMD. They had been having issues and we have been able to control the situation.
“For instance, they had disagreement on appointments. We were decisive and we made a pronouncement.
“We advised them on how to go about doing things to sustain the stability we are gradually experiencing in the oil and gas industry.”
On the disputed contracts, the source said: “The award of about one or two contracts preceded the inauguration of the board. For instance, when the NNPC entered into the AKK pipeline contract, which the minister said was valued at approximately $3b, there was no board then. But when it was reported to the board, we were told it was at no cost to the Federal Government.”
The minister had accused the GMD of awarding $25 billion contracts without consulting either his office or the Board of NNPC.
He blamed the GMD of alleged insubordination, lack of adherence to due process and running a “bravado management style.”
He said: “The following major contracts were never reviewed by or discussed with me or the Board of NNPC:
- The Crude Term Contracts – value at over $10b
- The DSDP contracts – value over $5b
- The AKK pipeline contract – value approximately $3b
- Various financing allocation funding contracts with the NOCs – value over $3bn
- Various NPDC production service contracts – value at over $3bn – $4bn
“There are many more, Your Excellency. In most of these activities, the explanation of the GMD is that you are the Minister of Petroleum and your approvals were obtained. However, the correct governance should be that the Minister of State and the Board review the transaction and give their concurrence prior to presentation to you.
“As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media. The question is why is it that other parastatals which I supervise as Minister of State or Chair of their Boards are able to go through these contractual and mandatory governance processes and yet NNPC is exempt from these?
“I know that this bravado management style runs contrary to the cleansing operations you engaged me to carry out at the inception of your administration. This is also not in consonance with your own renowned standards of integrity.”