The Federal Government has declared that the Nigerian National Petroleum Company Limited 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.

Lokpobiri, while speaking about the divestment of international oil companies and the need to ramp up production, 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.

“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,” Lokpobiri declared.

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 neighboring 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.

On the supply of crude to Dangote and other local refineries, he expressed fear that this may suffer a setback except production is ramped up.

“Our ambition is to ramp up production. It is only when we ramp on production that the midstream and the downstream can also be successful. You know we resolve at the Federal Executive Council to sell crude to local refineries – Dangote and the other refineries that are refining products for local consumption.

“But the bigger challenge is whether we have enough quantity to be able to supply them because of certain things that happened before we came. You will agree with me that when I became minister one year ago, we were doing barely about a million barrels, but today we’re doing 1.7mbpd approximately, inclusive of condensate,” Lokpobiri said.

He added, “Supporting local refining is the way to go. We can look for investors to explore and ring out this crude, so I will be able to meet both our domestic obligation and also export some to be able to raise more dollars and meet our obligations.

“We are committed to ensuring we support local refineries with all the feed-stock. If you must supply refineries in Nigeria and you don’t have the crude to supply, it remains something that is written beautifully in a law.”

He said the Federal Government would ensure there is healthy competition by being fair to both the small and the big refiners.

https://www.google.com/amp/s/punchng.com/nnpc-has-no-funds-to-fix-old-pipelines-fg/%3famp

Outdated and Corroded Pipelines

Issue: The pipelines transporting Nigeria’s crude oil, constructed in the 1960s and 1970s, are now severely corroded and beyond their operational lifespan. This deterioration has led to increased vandalism, making it difficult to evacuate crude oil to terminals.

Solution: Public-Private Partnerships (PPP) for Pipeline Infrastructure
Countries like Brazil have successfully revitalized their oil infrastructure by leveraging PPPs. Nigeria should adopt a similar approach, inviting private investors to co-finance the replacement of old pipelines with modern, corrosion-resistant alternatives. This will ensure more secure transportation and reduce vandalism.

Insufficient Funding by NNPC

Issue: The Nigerian National Petroleum Company Limited (NNPC) lacks the financial capacity to undertake the necessary overhaul of the pipeline infrastructure.

Solution: Attracting Foreign Direct Investment (FDI)

Nigeria must boost investor confidence by offering incentives such as tax breaks, fast-tracked permits, and government guarantees. This approach, successfully implemented in Angola, has attracted billions in foreign investment, enabling infrastructure modernization without overburdening state coffers.

Smuggling of Fuel Across Borders

Issue: The persistent smuggling of fuel from Nigeria to neighboring countries is driven by the lower prices of petroleum products domestically, facilitated by security agents complicit in the illicit trade.

Solution: Market-Driven Pricing with Enhanced Border Controls
Mexico, facing similar issues, implemented a two-fold solution: adjusting fuel prices to reflect market realities and deploying advanced surveillance technologies at borders. Nigeria should gradually phase out subsidies while using drones and satellite technology to monitor border areas, making smuggling more difficult and less profitable.

Limited Crude Supply for Local Refineries

Issue: Although the Federal Government has committed to supplying local refineries like Dangote, there is concern about whether Nigeria can ramp up production sufficiently to meet domestic and export demands.

Solution: Expanding Exploration with Incentives
Indonesia faced a similar challenge and addressed it by offering financial incentives to companies willing to explore and extract oil from underdeveloped fields. Nigeria should implement a similar policy, offering tax incentives and reduced royalties to attract more exploration and boost crude output. This will ensure enough supply for local refineries and export markets.

Implementing Practical Solutions for Long-Term Success

To overcome the myriad challenges in Nigeria’s petroleum sector, the government must adopt practical, proven solutions tailored to the country’s unique circumstances. By modernizing infrastructure through PPPs, attracting FDI, adjusting pricing policies, and incentivizing exploration, Nigeria can unlock the full potential of its oil industry. These steps will not only solve the immediate problems but also lay the groundwork for sustainable growth and development in the sector, benefiting all Nigerians.

But fg get money build coastal road at 4b/km

It is well

No time wey una no dy get story to tell. Anything that will benefit the public is always impossible to you people

The wèrè president knew this before hand, goes ahead to buy 150billion Airbus and earmarked another 12b for presidential airfleet maintenance. Though this money is not enough, can it not be use to do part repair..

It is very crystal clear olè Tinubu does not come to save but to steal, kill and maim.

Ègbé ní fún Tilumpu àti àwòn Omo léhìn ee.

My Sìgìdì is been prepared.

But the thief in Aso Rock has #150b to buy a new jet, abi?

But there is money to subsidize Hajj,buy yacht and renovate vice president's resident.

Splashme:
But the thief in Aso Rock has #150b to buy a new jet, abi?

I'm telling you

COMRADES, the same NNPC spent over 175 billion Naira in two years on idle workers

What a joke!

With all the money they had, smoking fish everywhere.

This corn3 is like an old worn-out tyre. The more you patch, the more it leaks.

Is this a joke?

Naija go whyne you but no panic😔

Fantastically corrupt country dungpit for a reason

Who is surprised to hear this? Nobody [right][/right]

Corruption don finish everything

Wahala!

C h a i..






True true there's no money

Because everything that was available has been stolen, misappropriated, and embezzled!!



Please, they need N896b to be allocated to them again.

Noted.

knowing this, why are they then promising us the refinery will start working soon?

Sakamanjé

Agbados left the chat 🤣

There’s no point running NNPC that brings nothing to the table. Government should privatize every business under their control and prioritize tax collection.

Just use APC as prayer point against your spiritual enemy, you go just free gan..

America is where they are today not with people like this at the helm of affairs..


There is a problem and I don't know when we are going to come out of it..

shox:
But fg get money build coastal road at 4b/km

It is well

.
Wen we talk some fools wont understand.d coastal highway is very mch unnecessary.it would hav been better if it was train.Nigeria was supposed to prioritize its income by building pipelines bt d bastards dont understand wat it means to plan for d future.instead tinubu approved contracts on trillions to his business partners jst to steal fund.One day this tinubu will steal our wives...his thiefery has no limit...na him priority be that

Scrap the useless organization

Wetin be the long gutter wey una dig close to the eleme refinery pipelines stretching to nnpc Jetty...hope e no go be abandoned projects cos already e dey obstruct movement.