The Federal Government has acknowledged that the Nigerian National Petroleum Company Limited (NNPC) lacks the necessary funds to refurbish the country’s aging pipeline infrastructure.
Speaking at the 2024 Energy and Labour Summit organized by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, highlighted the urgent need for pipeline repairs to address the challenges of crude oil evacuation.
Lokpobiri noted that the existing pipelines, built in the 1960s and 1970s, have long surpassed their operational lifespan and are now severely corroded.
He explained that even if Nigeria can increase production beyond 1.7 million barrels of crude oil per day, transporting the oil to terminals remains a significant hurdle due to the deteriorated state of the pipelines.
“These pipelines are not just old; they are completely corroded, making them vulnerable to vandalism. Replacing them with better, more secure technology is essential, but it is also expensive,” Lokpobiri stated.
He expressed doubts about the NNPC’s financial capability to undertake such a massive overhaul, suggesting instead a public-private partnership (PPP) approach to attract private sector investment.
Lokpobiri also addressed the issue of fuel smuggling, attributing it to the disparity between the cost of imported petroleum products and the prices at which NNPC sells them locally.
He emphasized that without addressing this price gap, smuggling activities would persist, further complicating Nigeria’s role in ensuring energy security across West Africa.
Regarding local refining, Lokpobiri raised concerns about the country’s ability to supply enough crude oil to meet the needs of domestic refineries, including the Dangote refinery.
He stressed the importance of increasing production to support local refining and maintain a balance between domestic consumption and exports.
The Minister assured that the Federal Government is committed to fostering healthy competition among both large and small refiners, ensuring fair access to crude oil supplies.
