Federal Government Laments Lack Of Resources For Pipeline Repairs

Federal Government Laments Lack Of Resources For Pipeline Repairs....KINDLY READ THE FULL STORY HERE▶

The Federal Government has announced that the Nigerian National Petroleum Company Limited (NNPC) lacks the necessary funds to rebuild the country’s aging pipelines. This statement was made by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, during the 2024 Energy and Labour Summit organized by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja……CONTINUE READING 

Lokpobiri highlighted the challenges facing Nigeria’s oil sector, particularly the divestment of international oil companies and the urgent need to increase oil production. He stressed that the country must also address the deteriorating state of its pipelines, which are old, corroded, and long past their expiration date.

He noted that even if Nigeria could produce over 1.7 million barrels of crude oil daily, the real challenge lies in transporting it to export terminals.

“Our pipelines, built in the 1960s and 1970s, have exceeded their lifespan. Even when we can produce, evacuating the oil is a significant problem. The ease with which vandals can damage these pipelines is due to their advanced state of corrosion; they are so deteriorated that anyone can tap into them. However, newer and more expensive technologies are available, which other countries use, but they come at a high cost. We also need to change our model,” Lokpobiri explained.

The minister questioned whether NNPC has the financial capacity to replace these pipelines, suggesting that they likely do not. As a solution, he called for public-private partnerships (PPP) to address the issue. He emphasized the need to attract private sector investment, which requires restoring investor confidence—a task the current government has been working on.

Regarding fuel smuggling, Lokpobiri noted that it persists because NNPC imports fuel and sells it below the landing cost, making smuggling to neighboring countries profitable. He also pointed out the complicity of security agents in this illegal activity.

“Nigeria plays a critical role in Africa’s energy security, which is why any petrol we import finds its way across West Africa. Smuggling will not stop as long as there is a price disparity, and the involvement of local security agents only exacerbates the problem,” he said.

Lokpobiri also expressed concern about the supply of crude oil to local refineries, including the Dangote Refinery. He warned that unless production is increased, it may be challenging to meet the needs of these refineries.

“Our goal is to ramp up production because the success of the midstream and downstream sectors depends on it. While the Federal Executive Council has resolved to supply crude to local refineries, the bigger issue is whether we have sufficient quantities to do so. When I became minister a year ago, we were producing about a million barrels per day. Today, we are at approximately 1.7 million barrels per day, including condensates,” he stated.

Lokpobiri reiterated the government’s commitment to supporting local refining and ensuring fair competition among both small and large refiners. He also highlighted the importance of increasing crude production to meet domestic needs and generate revenue through exports.

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