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$25b NNPC contracts not awarded, presidency insists

By Bridget Chiedu Onochie and Terhemba Daka, Abuja
16 October 2017   |   4:41 am
Laolu Akande said no contracts were awarded by the NNPC based on the memo of the Petroleum Resources Minister of State, Dr. Ibe Kachikwu to President Muhammadu Buhari, even though the impression has been maliciously created in the past few weeks.

The Group Managing Director of NNPC, Maikanti Baru PHOTO: TWITTER/NNPC

• Communities sue Kachikwu, others over Ogoni cleanup

The presidency has dismissed the claim that $25 billion contracts were awarded by the Nigerian National Petroleum Corporation (NNPC) or that the amount is missing.

According to the Senior Special Assistant to the Vice President on Media and Publicity, Mr. Laolu Akande, no contracts were awarded by the NNPC based on the memo of the Petroleum Resources Minister of State, Dr. Ibe Kachikwu to President Muhammadu Buhari, even though the impression has been maliciously created in the past few weeks.

While responding to media inquiries yesterday on the matter, Akande disclosed that a closer look at each of the said projects reveals clearly that they are not procurement contracts.

“When I tweeted on Thursday morning last week, I had indicated that the vice president, while acting as president, approved joint venture financing arrangements. But for some curious reasons, a few media reports used that tweet to report that I said the then acting president approved N640 billion worth of oil contracts. The report is both false and misleading and therefore ought to be completely ignored by all seekers of truth,” Akande said.

According to him, what is more important is that “when you look diligently at the referenced projects/transactions one by one, you will see, as NNPC has shown, that none of them is actually a procurement contract.

“Take both the Crude Term Contract and the Direct Sale, Direct Purchase (DSDP) agreements, for instance, these are not procurement contracts involving the expenditure of public funds. Both transactions are simply a shortlisting 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’re contracts involving the expenditure of NNPC funds, or public funds of any sort. As you now know, the Minister of State for Petroleum Resources himself has clarified that he meant to focus on administrative and governance issues, not to red-flag any fraud because no fraud exists in this matter.”

Akande said it was not true and also inaccurate to attach $10billion and $5billion values to both transactions. “Attaching monetary values to these contracts is an arbitrary act that completely distorts the understanding of the situation.

“Nigerians ought to be informed clearly that whenever there is a monetary value on any consignment of crude oil lifted in this country by any firm, the proceeds go directly to the Federation Account and not to any company. In fact, the Buhari administration in the implementation of the Treasury Single Account (TSA) has closed down multiple NNPC accounts in order to promote transparency and probity.”

The presidential aide 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 (EoI). Bids were publicly opened in the presence of NEITI, DPR, BPP, Civil Society groups and the press. In some cases even, these events were televised live.”

He disclosed that the Ajaokuta-Kaduna-Kano (AKK) gas pipeline contract “is a contractor-financed contract which has not yet been finalised or awarded; it is still making its way to the Federal Executive Council (FEC).”

According to Akande, there are three presidential approvals given on joint venture financing arrangements, meaning loans to cater for cash call obligations. He said that one of them was okayed by the president in 2015, and two by the then acting president in 2017.

On the Nigerian Petroleum Development Company (NPDC), he said there was no contract in the $3billion to $4billion range as reported in the media.

“You can then see from the foregoing that the $25billion being bandied in the media does not exist. There is no $25 billion missing,” Akande concluded.

Meanwhile, elders of Bolo communities in Ogu/Bolo Local Government Area of Rivers State have taken Kachikwu, Group Managing Director of NNPC, Dr. Maikanti Baru and Shell Petroleum Development Company of Nigeria Limited before the Federal High Court, Abuja, over alleged fraud in the ongoing Ogoni oil spill cleanup.

The communities alleged that the compensation that ought to have been given to them following two massive oil spills that occurred in their area between 2008 and 2009, was diverted. They said the spills were from the 24-inch Trans-Niger Pipeline owned by Shell which is the seventh defendant in the suit.

While Kachikwu, Baru and Shell were sued as the first, third and seventh defendants, other defendants in the matter include minister of environment, chairman and members, board of trustees of Hydrocarbon Pollution Remediation Project (HYPREP), chairman and members of the governing council of HYPREP, and the project cordinator, Dr. Marvin Barinen Dekil.

The plaintiffs in the suit that was endorsed by two representatives of the Amayanabo leaders, Chief Inyengimiesi Igbikowibo Ayomadiki and Chief Marshal Da-Ockiya Oforibokakaka, told the court that Shell admitted liability over the spills that affected their swamps, creeks, drinking water sources, fishes and general environment and lifestyle.

They also stated that owing to the level of devastation the oil spill caused to their environment, the Federal Government, in conjunction with Shell and UNEP, commissioned a study to look at the environmental pollution in Ogoniland and its effect on the people, without getting them involved in the exercise.

According to the communities, when the UNEP report was released in August 2011, their communities discovered that oil well facilities in Bodo West oil fields operated by Shell were arbitrarily regarded as part of Ogoniland oil facilities, and the compensation meant for them diverted.

They told the court that the Federal Government equally sidelined them in HYPREP that was set up in 2016 to oversee the cleanup and restoration of polluted areas.

Specifically, the plaintiffs through their lawyer, Mr. Ngo Obanga, are praying for an order of court interpreting a portion of page 53 of the Environmental Assessment of Ogoniland (UNEP) Report of 2011, which provides as follows: “That Bodo West is an area within the extensive network of creeks. Though uninhabited, it included a number of oil wells. The wells themselves are submerged, while the associated production station (now decommissioned) is on land.

“That Bodo West is officially mapped as belonging to Ogu/Bolo LGA but since there are no local settlements, it has been regarded by both SPDC and the Ogoniland as oil facilities. Bodo West was therefore included in the scope of UNEP’s work.”

Consequently, they are asking the court to grant them N5 billion as general damages against the seventh defendant for misrepresentation and attempt to erode the dignity and deprive the plaintiffs of their constitutional rights under the 1999 constitution as amended.