Jolted by two consecutive investigative reports x-raying procurement irregularities and sophisticated corruption of due process at the Nigerian National Petroleum Corporation (NNPC), the presidency this week summoned the Corporation’s Group Managing Director (GMD), Mele Kyari, to the Villa.
The GMD was summoned to explain how, under his watch, an intricate web was woven by top officials to dispose 30 million litres of slop oil in a manner that violated the nation’s public procurement regulations.
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In the wake of the inability of Kaduna, Port Harcourt and Warri refineries to produce Low Pour Fuel Oil (LPFO) as a result of a major rehabilitation exercise slated to last 44 months, slop oil is the only alternative to LPFO, a product of fractional distillation used to power boilers in manufacturing facilities, including cement factories.
Without slop oil as an alternative, most manufacturing facilities in the country would be shut down with the attendant layoff of thousands of workers.
Consequently, available slop oil in Nigeria is viewed as a national strategic stock. It is this stock that cash-hungry NNPC officials contrived and sold off to export companies who will ship them to overseas end users.
NNPC’s action outraged local stakeholders who considered the transaction as an affront on President Muhammadu Buhari’s policy of supporting local manufacturing industries as part of his post COVID-19 economic recovery plan.
On Tuesday, Mele Kyari was at the presidential Villa in response to a summon by the President, according to those familiar with the matter.
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In preparation for an inevitably difficult grilling session, the NNPC GMD, our sources said, quickly called a meeting of all his Group Executive Directors (GEDs) to marshal a defence. It was gathered that he went with a written defence.
The NNPC reportedly conducted a controversial bid that saw scarce slop oil ending up in the hands of three preferred bidders, all of them in the export category.
Checks by this newspaper had further revealed that the first two bid-winning companies were owned by the same directors.
Just as Mele Kyari was facing uneasiness on his first questioning session, it emerged that the NNPC GED in charge of refineries, Mustapha Yakubu, and the Managing Director of Port Harcourt Refinery, Ahmed Dikko, remained apprehensive over what fate might befall them. Mr Dikko is said to have masterminded the controversial bid.
Some NNPC officials, industry players said, had wanted to dispose the precious slop oil through single-source procurement procedure so they could sell it off to cronies at rock-bottom price.
When they were told single source procurement would not fly in the face of procurement laws, they resorted to a cosmetic competitive bid fraught with irregularities.
The bid outcome became even more embarrassing to industry watchers when none of the preferred companies could pay for the product they won.
When Sign Oil &Gas Ltd could not pay, the allocation went to the second bid winner, Synthesis Integrated Pure Oil whose bid was about N180 million lesser than that of Sign Oil.
Both Synthesis Oil and Sign Oil are owned by the same directors. Again when Synthesis Oil could not pay, the allocation was transferred to the third place winner Kurpo Energy Ltd, whose bid was N180 million lesser than that of Synthesis Oil and N360 million lesser than that of the first bid winner, Sign Oil.
The reason for the creation of this convoluted route by NNPC officials is part of the puzzles the presidency is trying to unravel.
It is said that Mustapha Yakubu, the GED in charge of refineries, is having difficulty controlling Mr Dikko, a close ally of the GMD. To what extent Mr Kyari was able to control both Messrs Yakubu and Dikko in the saga is a matter of interest to the Presidency who have ordered the NNPC’s GMD to go and return next week with the Minister of State for Petroleum, Timipre Sylva.
The NNPC consistently declined multiple requests by this newspaper to comment on this matter.
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