The Federal Government has declared that the Nigerian National Petroleum Company Limited (NNPCL) does not have the funds required to rebuild old pipelines.
The Minister of State for Petroleum Resources, (Oil), Heineken Lokpobiri, stated this at the just concluded Energy and Labour Summit 2024 organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja.
Speaking on the divestment of international oil companies and the need to ramp up production, he emphasised that Nigeria also needs to repair its pipelines, which he said are old, corroded, and expired.
He noted that even if the country can produce more than 1.7 million barrels of crude oil, the problem is how to evacuate it to the terminal.
He said “Part of our problem is that pipelines that were traditionally transporting our crude were built in the 1960s and the 1970s and the lifespan is since over. We have identified that even when we can produce, evacuation is a big problem.
“The reason why pipeline vandalism is very easy to do is because the pipelines have all expired they completely corroded and so, anybody can just go and tap it and the thing is busted; but there are better technologies which are more expensive, there are better pipelines that other people are using in other countries, but they are not cheap, We also need to change our model.
“Now, the NNPC that is our joint venture partner, do they have the money to be able to replace these pipelines? I think NNPC will speak for themselves whether they have the money to be able to do that, and I don’t think they have”.
Consequently, he called for public-private partnerships to fix the old pipelines, saying, “That is why we have to go for the global model – PPP. We have to get the private sector to come in.
For the private sector to come into any country to invest, he said they must have confidence in such a country, stressing that this was lacking in the past 12 years when there was no foreign investment in the nation’s oil company.
“When this government, came we tried to rebuild the confidence and investors are coming,” Lokpobiri added.
The oil minister maintained that the smuggling of fuel from Nigeria to other neighbouring countries is because the NNPC imports and sells below the landing cost.
“Nigeria plays a very critical role in the energy security in Africa. That is why whatever PMS we import into Nigeria finds its way to the whole of West Africa. That is why smuggling cannot stop. If NNPC Imports PMS and sells to marketers at perhaps N600 or below, there’s no way that smuggling can stop,’ saying the security agents at the borders are also involved.
“When smugglers are taking the products outside the country, even if you put all the policemen on the road, they are Nigerians; you and I know the answer. If you put all the customs men on the road, they are Nigerians, you and I know what the problem is, and that is why I’m saying that for Africa to attain energy security, Nigeria has to play a very strategic role,” he remarked.
