Nigeria oil corp blasts claims of $25B contract fraud

By Rafiu Ajakaye

LAGOS, Nigeria (AA) - Nigeria’s state-owned oil firm on Monday denied awarding any contracts without following due process, dismissing as “baseless” claims by Petroleum Minister Ibe Kachikwu that the agency routinely flouts the law.

In a memo leaked to the media last week, Kachikwu accused the Nigeria National Petroleum Corporation (NNPC) of awarding $25 billion contracts without passing through him or the NNPC board.

The memo triggered a national outrage, with parliament calling for the suspension of NNPC chief Maikanti Baru and the minister to allow a probe.

But the agency said in a statement on Monday that Kachikwu’s claims were not correct, as all the contracts it ever awarded had been approved by the NNPC tender’s board -- the agency's “final approving body” in contracts not exceeding $20 million.

“Furthermore, it is established that apart from the AKK [$3 billion Ajaokuta-Kaduna-Kano] project and [$3-$4 billion Nigerian Petroleum Development Company] NPDC production service contracts, all the other transactions mentioned were not procurement contracts,” NNPC spokesman Ndu Ughamadu said in the statement.

“The NPDC production service contracts have undergone due process, while the AKK contract that requires [Federal Executive Council] FEC approval has not reached the stage of contract award,” it added.

Ughamadu added that it is “inappropriate to attach arbitrary values to the shortlists with the aim of classifying the transactions as contracts above NNPC Tenders Board limit. They are merely the shortlisting of prospective off-takers of crude oil and suppliers of petroleum products under agreed terms.

“These transactions were not required to be presented as contracts to the Board of NNPC and, of course, the monetary value of any crude oil eventually lifted by any of the companies goes straight into the federation account and not to the company.”