NNPC financially incapacitated to fix pipelines - FG

The Federal Government has declared that the Nigerian National Petroleum Company Limited does not currently have the resources required to repair aged pipelines.

Aug 26, 2024 - 05:23
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NNPC financially incapacitated to fix pipelines - FG

The Nigerian National Petroleum Company Limited does not currently have the necessary funding to rehabilitate aging pipelines, according to a statement made by the Federal Government. At the recently concluded Energy and Labour Summit 2024, which was hosted in Abuja by the Petroleum and Natural Gas Senior Staff Association of Nigeria, this was said by Heineken Lokpobiri, the Minister of State for Petroleum Resources (Oil). In his remarks regarding the divestiture of foreign oil businesses and the necessity of increasing output, Lokpobiri emphasized that Nigeria must also fix its aging, damaged, and expired pipelines. Even if the nation is capable of producing over 1.7 million barrels of crude oil, he pointed out that getting that oil to the port is a challenge.

"One aspect of our issue is that the pipes that were used to move our oil were constructed in the 1960s and 1970s, and their useful lives have since ended. We've found that evacuation remains a major issue even in cases where production is feasible.Pipeline vandalism is particularly simple because the pipelines have all completely corroded and expired. This means that anyone can simply go to a pipeline and tap it, breaking the pipe; however, there are more expensive, better technologies available, as well as more expensive, better pipelines that are being used in other nations. We also need to adjust our paradigm.

"Are the funds available for NNPC, our joint venture partner, to replace these pipelines? If NNPC has the funds to be able to achieve that—which I don't think they have—I think they will speak for themselves, said Lokpobiri. In order to fix the outdated pipes, he consequently advocated for public-private partnerships, saying, "That is why we have to go for the global model – PPP." The commercial sector needs to get involved. He noted that in order for the private sector to enter a country and make investments, it must have faith in that nation. He emphasized that this confidence was lacking during the previous 12 years, during which time there was no foreign investment in the country's oil firm.

According to the oil minister, NNPC imports and sells fuel below the landing cost, which is why it is being smuggled out of Nigeria and into neighboring nations. An important factor in ensuring Africa's energy security is Nigeria. For this reason, any PMS that we bring into Nigeria ends up throughout all of West Africa. For this reason, smuggling will never end. There is no way that smuggling can end if NNPC imports PMS and sells it to marketers for maybe N600 or less, the company claims, adding that security personnel stationed at crossings are also implicated.

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