FG: NNPC Unable To Finance Pipeline Rehabilitation

FG: NNPC Unable To Finance Pipeline Rehabilitation

Speaking at the Energy and Labour Summit 2024 in Abuja, Lokpobiri discussed the urgent need to address the outdated and corroded pipelines, which are crucial for transporting the country’s crude oil. Despite Nigeria’s capacity to produce over 1.7 million barrels per day, the transportation infrastructure is a major bottleneck.

Lokpobiri noted that the pipelines, built in the 1960s and 1970s, are well past their operational lifespan. Their poor condition makes them susceptible to vandalism, as they are easily accessed and damaged. While there are more advanced and costly technologies available, Lokpobiri questioned whether the NNPC has the financial resources for such upgrades.

He emphasized the need for public-private partnerships (PPPs) to address these infrastructure issues, suggesting that private sector involvement could bring necessary investments. He also highlighted a lack of investor confidence over the past 12 years, which has hindered foreign investment in Nigeria’s oil sector.

Addressing fuel smuggling, Lokpobiri pointed out that the NNPC’s practice of importing and selling fuel below cost contributes to the problem, with security agents at borders also implicated.

Regarding local refineries, Lokpobiri expressed concerns about potential setbacks if production does not increase. Although production has risen from around 1 million barrels per day to approximately 1.7 million, there are still challenges in meeting the needs of local refineries like Dangote’s. He stressed the importance of boosting production and ensuring adequate supply for domestic refining while also seeking investors to enhance the sector’s capacity.

Lokpobiri reaffirmed the government’s commitment to promoting local refining and ensuring fair competition among refiners to bolster the industry’s growth and stability.