Petroleum Resources Ministry And NNPC : The Dirty Deals Within

Allegations of Illegal Withdrawals Trail Successive NNPC GMDs

• NNPC Officials Bypass Minister to Award $20Bn Contracts

•Mexican Firm Alleges NNPC Officials Sold Millions of Stolen Crude

* It’s Not True, Says NNPC

•How Ministry of Petroleum Resources Spent N116 m On stationeries

By Mike Odeh James

It is no longer news that the deep-seethed illegality and abuse of financial procedures, which have characterized the operations of the Nigerian National Petroleum Corporation, NNPC, in the last few decades, have continued unabated under this present administration despite the acclaimed anti-corruption war of the President.

Between 2017 and 2020, the Nigeria National Petroleum Corporation, NNPC, has been mired in a myriad of controversies ranging from illegal withdrawals and non-remittances of money to appropriate authorities and many others.

In September 2017, Dr Emmanuel Kachikwu Ibe, Minister for State for Petroleum Resources, sent a letter to the President alleging widespread of financial misappropriation in the NNPC.

The former oil minister, in his letter to President Muhammadu Buhari, said at least $24 billion of contracts involving the state oil company were awarded without due process nor with his knowledge or that of the NNPC board.  Mr. Ibe in the letter pointedly accused the Group Managing Director of the NNPC, Maikanti Baru, of flouting laws guiding the state corporation that any financial transaction above $20 million would need to be reviewed and approved by the NNPC board.

Ibe listed series of alleged abuses of process in the Nigerian National Petroleum Corporation under Dr. Maikanti Baru, these infractions include: insubordination, circumvention of authorities in the award of contracts which came up to about $25 billion, in gross violation of the NNPC Act.

The GMD of NNPC, it was alleged, singlehandedly awarded the contracts worth about N9 trillion, N2.3 trillion more than Nigeria’s total budget without recourse to the board of the corporation.

A livid Mr. Ibe further explained that all his attempts to see President Buhari over the issue were frustrated by persons close to the President.

Mr. Kachikwu Ibe’s letter partly reads: “The legal and procedural requirements are that all contracts above $20 m would need to be reviewed and approved by the board of NNPC. Mr. President, over one year of Mr. Baru’s tenure, no contract has been run through the board.

“As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media,” Ibe wrote.

The ex-minister also listed major contracts awarded by Baru without the input of NNPC board to include $10 billion crude term contracts; $5 billion direct sales direct purchase (DSDP) contracts; $3 billion AKK pipeline contract; financing allocation funding contracts worth $3 billion; and NPDC production service contracts valued at $3-$4 billion.

“Contracts of those sizes need to be approved by one of two bodies; the NNPC board or the cabinet. Ibe sits on both and if he did not know about them, then something is terribly wrong,” Ibe said.

However, the former GMD of the corporation, Baru, defiantly argued that the laws of the commission “do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters.”

The NNPC boss then insisted that what requires for award of such contracts are the approval by the NNPC Tender Board, the approval of President Buhari as the Minister of Petroleum or the ratification of his transaction by the Federal Executive Council which is also headed by President Buhari.

Maikanti Baru’s letter partly reads:

“It is important to note from the outset that the law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters. What is required is the processing and approval of contracts by the NNPC Tenders Board, the  

President in his executive capacity or as Minister of Petroleum, or the Federal Executive Council (FEC), as the case may be.

“There are therefore situations where all that is required is the approval of the NNPC Tenders Board while, in other cases, based on the threshold, the award must be submitted for presidential approval. Likewise, in some instances it is FEC approval that is required.

“It should be noted that for both the Crude Term Contract and the Direct Sale and Direct Purchase (DSDP) agreements, there are no specific values attached to each transaction to warrant the values of $10billion and $5billion respectively placed on them in the claim of Dr. Kachikwu.

In spite of Baru’s defense, what is noticeable in 2017 Kachikwu/Kanti Baru saga is monumental financial misappropriation that is ongoing at the NNPC and with the knowledge of the Minister of Petroleum who is incidentally the President.

Senate Discovers Multiple Illegal Withdrawals

Barely a year after the controversy raised by the former Minister of State for Petroleum died down, another scandal was unearthed.

Senator Bassey Akpan, who was the Chairman of Senate Committee on Gas, on November 2018, stunned the nation when he said that his committee had discovered the illegal withdrawal of $1.15bn from the dividends of Nigerian Liquefied Natural Gas by the NNPC. Senator Bassey revealed that the Central Bank of Nigeria, CBN, was the vehicle used for the illegal withdrawals.

Before the latest discovery then, the NNPC was accused of withdrawing $1.05bn without the knowledge of the Senate which has the oversight function on the NNPC.

Nonetheless, the man at the epicenter of the whole illegal withdrawal saga, Maikanti Baru, admitted to withdrawing the sum of $ 1.05 bn. He, however, placed the responsibility on President Muhammad Buhari, saying he was ordered to withdraw the said amount by the President.

He also gave reasons for the withdrawal, saying that “the $1.05bn was withdrawn to Lagos the gap of losses suffered by the corporation on landing cost of imported fuel, which was N185 compared to the pump price of N145 then. But Bassey demurred on Kanti’s defense, he said a document tagged, “Memo NNPC GMD 49” signed by Maikanti Baru and sent through the Chief of Staff to the President, Abba Kyari, had no clear-cut language of a request for approval for the withdrawal of the $1.05bn but a mere notification.

“Approval for withdrawal from such fund was supposed to be given by the National Economic Council being an account or dividends owned by the three tiers of government.

According to a Financial Expert, Alex Agbo, what the Akpan committee discovered was a major financial breach and misappropriation of funds. He added that the said fund could not be accessed with due approval of National Economic Council.

 “The President, the Federal Executive Council nor the National Assembly cannot approve the withdrawal of the fund.

“Secondly, withdrawal was done secretly without the knowledge of Nigerians, only Buhari, Kyari and Baru were in the know of this shady activity,” Agbo added.

The former Senate President, who was the President of the Senate when the discoveries were made also stated that it was illegal for President Buhari, Kanti and the Executive arm to unilaterally draw from the NLNG dividend funds without appropriation by the National Assembly.

Saraki also said the dividends paid to Federal Government from NLNG business were supposed to be kept in the Federation Account and shared among the three tiers of government.

Records Shows Withdrawals Revolve Around Buhari’s Approval With Consent Of Relevant Bodies

In all the accusations levied against the NNPC GMD, the first being the award of contracts totaling $24bn, the second $1.05bn and the third about $1.15bn  NNPC boss had always claimed as alibi President’s knowledge.

More so, the relevant authorities which have oversight functions over NNPC, such as the Minister of State for Petroleum, the National Assembly and the National Economic Council have shown that they were not aware of these deductions.

Thus grave financial breaches have been committed by the President and his team.

Incidentally, the role of an unseen but powerful figure lurked behind at every nocturnal deductions made by the GMD.

Kachikwu Ibe, a Minister, complained that he was prevented by some persons when he attempted seeing President Buhari on the issues bordering illegal withdrawal by Baru.

Similarly, the Chairman, Senate Committee on Gas, Mr. Akpan Bassey, implicitly insinuated that the request to withdraw $1.15 was casually and informally routed through the office of the President’s Chief of Staff.

Suffice it to say that Abba Kyari, the Chief of Staff, is at the centre of these illegal deductions with the approval of Buhari as Kanti Baru had cited in earlier cases.

Not done with illegal withdrawals and deductions, details began to emerge as way back as June 2020 of outright theft and sale of Nigeria’s crude oil by the current GMD of NNPC, Mele Kyari, President’s Chief of Staff, Abba Kyari and some aides of the President.

A whistle blower exposed one of the most damaging scandals in the lifespan of this administration.

According to the whistle blower, in 2015, some members of Buhari’s government and top NNPC staff took advantage of the chaotic handover between the outgoing Goodluck Jonathan administration and the incoming Buhari government to steal about 48 million barrels of Bonny Light crude oil.

The oil was shipped to Zhoushan in China and stored in tanks and kept in several ports. While the NNPC officials secretly scout for buyers. However, most of the buyers refused to do deal with the roguish NNPC staff realising that the products were stolen.

After a lengthy search, the Nigerian officials got a South American oil firm Samano SA De CV to commit to buying the stolen crude, unbeknownst to its officials. And on realising that oil had no DNA and possibly stolen, Samano officials alerted the Nigerian authorities.

Samano officials also stated that they notified the current NNPC GMD, the late Chief of Staff to President, Abba Kyari and Umar Mohammed.

Nonetheless, when they made efforts to contact the President, Umar Mohammed prevented them.

According to a Nigerian online paper, Pointblanknews.com, SAMANO received a letter in August 2016 from Hamman Saleh, now Minister of Power, through his company, Northon Oil and Gas Services, inviting them to Nigeria to meet with government officials to discuss the matter.

Sources confirmed to Pointblanknews.com that the invitation letter to SAMANO came after the company refused to send details of the found crude via electronic Abuja.

After a brief persuasion, officials of Samano CV De came to Abuja and held series of meeting with the late Abba Kyari, Mele Kyari and Umar Mohammed.

It was agreed that a high powered Nigerian delegate would go to China and investigate the lead provided by Messrs. José Salazar Tinajero, A. Nick Cadena, and Juan Carlos Jaramillo García on behalf of Samano.

The agreement between Samano officials and the Nigerian government delegation was that if the allegations were found to be true, Samano would get the normal 5 percent of the proceeds from the sale of the crude oil and was the official policy of the Buhari government.

Accordingly, Mele Kyari and the late Abba Kyari led a powerful delegation and on geting to China, the Nigerian delegation simply switched sides, connived with the corrupt NNPC staff and sold off over 40 million barrels of Brent light crude worth over $800 million.

Then, Abba Kyari and his group simply convinced President Buhari that the whole thing was a hoax.

The same group also decided to double-cross Samano CV De by reneging on the 5% of the deal cut with the officials.

Pointblank.com alleged that the $800 million was shared between government officials.

“Buhari’s late Chief of Staff, Mallam Abba Kyari, Late Group General Manager, Nigerian National Petroleum Corporation, NNPC, Maikanti Baru, Attorney-General and Minister of Justice, Abubakar Malami, Minister for Power, Saleh Mamman, as well as the current GMD, NNPC, Mele Kyari were reported to have shared the $800 million”, Pointblank.com added.

Nigerian Government Denies

The NNPC had since denied the allegations of conniving and selling off over 42 million of Bonny Light Crude oil 

In a statement signed by Age Babalola (SAN), the Corporation explained that “It was impossible to ship 48 million Barrels of Crude Oil from Nigeria to China without any record or trace of same.

The statement further reads “For context, as of 2015, the daily production of crude oil in Nigeria was below 1.6 million barrels. Therefore, 48 million barrels of crude oil would have been the total production  capacity of the country for a whole month. It was and remains simply impossible for one-month crude oil production for the entire country to disappear without any record or trace from the shores of the country”.

The State owned corporation also insisted that after due investigation,  it was discovered that SAMANO’s claim was false, as there were no 48 million Barrels of stolen Nigerian Crude Oil or any stolen Nigerian Crude Oil in any port, terminal or storage facility in China.

So it decided to severe any form of communication with Samano.

Many stakeholders in the petroleum sector agreed with the defense put up by the NNPC in the sense that 42 million barrels of Brent Light crude could not be secretly ferried out of the country. However, Alex Agbo is of the opinion that the figure of 42 million barrels quoted by Samano officials may actually be less.

Alex also averred that the fact that top officials from the Buhari administration hosted Samano officials, went to China and made investigations but kept the findings to themselves suggest that there was a deal.

He also added that, “For the officials of Samano to boldly accuse Nigerian officials of shortchanging them by reneging on the 5% cut from the proceeds from the sale of the crude oil means that there was a transaction and a party was cheated.”

Alex Agbo also added that “the NNPC has a history of shady dealings and so no one can vouch for it.”

However, Former Deputy Spokesman for All Progressives Congress, Timi Frank, is of the opinion that President Buhari should have suspended Mele Kyari as GMD of NNPC and others named and then instituted a panel of enquiry.

Frank argued that the silence of the President simply means that the President is actually in the know of the happenings.

Nonetheless, the NNPC has commenced the process of suing Samano for defamation. 

However, Samano had months back sued the Federal Government for reneging on its agreement.

Another Scandal Hits Ministry Of Petroleum Resources

Just when the Petroleum sector was recovering from the scandals that had bedeviled the Nigerian National Petroleum Corporation, the Ministry of Petroleum Resources which President Buhari directly superintends as the Minister, was slammed with a jaw breaking scandal.

In early December 2020, the office of the Auditor-General of the Federation, AUGF, revealed to a bewildered Senate member that the Ministry of Petroleum Resources spent about N116m to purchase pens, toners and other stationeries in one year.

The breakdown of the expenditure showed that the ministry spent N14.5 million to purchase Schneider biros, N46 million to print the ministry’s letterhead, and N56 million to procure toner for its photocopy machines.

The AUGF, however, stated that the figure it gave was for 2015 prompting the suspicion that the same amount or more had been expended in 2016- 2020.

Knowing the penchant of the current administration for secrecy and cover-up, a rights organization, Socio-Economic Rights and Accountability Project, SERAP, urged President Buhari and the Minister of State for Petroleum Resources, Timipre Sylva, to urgently probe how N116 million was spent by the ministry to buy biros, letterhead and toners in 2015, and to disclose the amount also spent on the same items between 2016 and 2020.

In a release, SERAP threatened to seek legal means to compel the Presidency and Minister to comply with its request. “We would therefore be grateful if you would indicate the measures being taken to probe the spending of N116m on biros, letterhead and toners in 2015, and disclose the total amount spent on the same items between 2016 and 2020 within 14 days of the receipt and/or publication of this letter.

“If we have not heard from you by then as to the steps being taken in this direction, the Registered Trustees of SERAP shall take all appropriate legal actions to compel your Ministry to implement these recommendations in the interest of transparency and accountability.

DESERT HERALD has not received any notification that the Ministry of Petroleum Resources had replied to SERAP. However, many political observers are saying that the ministry which President Buhari supervises stinks to high heavens of corruption.