The Federal Government has revealed that the Nigerian National Petroleum Company Limited (NNPC) does not have the necessary funds to repair the country’s aging pipelines.
Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), made this announcement during the Energy and Labour Summit 2024 organized by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja.
Lokpobiri highlighted the urgent need to address the condition of Nigeria’s pipelines, which he described as old, corroded, and beyond their expected lifespan. He noted that while Nigeria can produce over 1.7 million barrels of crude oil, transporting it to terminals remains a significant challenge.
“The pipelines used for transporting our crude were built in the 1960s and 1970s, and their lifespan has long expired. Even when we can produce oil, evacuation remains a major problem,” Lokpobiri said.
He attributed the ease of pipeline vandalism to their dilapidated state, which makes them susceptible to attacks. While better and more costly pipeline technologies are available, Nigeria has yet to adopt them.
Lokpobiri questioned whether NNPC, a key player in the country’s oil sector, has the financial capacity to replace these outdated pipelines. “NNPC will have to speak for itself regarding its financial ability to undertake such replacements, but I don’t think they have the funds,” he stated.
To address this issue, Lokpobiri advocated for public-private partnerships (PPP) to fund pipeline repairs. He emphasized that private sector investment requires confidence in the country, which has been lacking in recent years but is improving under the current administration.
The minister also discussed fuel smuggling, attributing it to the NNPC’s practice of importing and selling fuel below its landing cost. He suggested that smuggling is perpetuated by the involvement of security agents at the borders.
Regarding crude oil supply to local refineries like Dangote, Lokpobiri expressed concern that production levels may need to be increased to meet local demand. He noted that production has risen from about one million barrels per day to approximately 1.7 million barrels per day, including condensates.
“Supporting local refining is crucial. We must attract investors to explore and extract more crude, ensuring we meet both domestic needs and export requirements to generate revenue,” Lokpobiri said. He assured that the government is committed to supporting local refineries and maintaining fair competition among both small and large refiners.
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