The Federal Government has revealed that the Nigerian National Petroleum Company Limited does not have the resources required to fix the destroyed pipelines in the country.
The Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), revealed this development at the just-concluded Energy and Labour Summit 2024, organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja.
The minister noted that the Nigerian government should take urgent steps to repair the destroyed pipelines in the country. He made the charge while speaking on the investment of international oil companies and the need to increase oil production.
He explained that if the country can produce crude to 1.7 million barrels per day, the concern always remains about how the oil produced could be transferred to the terminals around the country. He further explained that the life span of the pipelines that were built in the 1960s and 1970s has elapsed, which calls for the construction of new ones.
The minister also explained that pipeline vandalism has been high because criminals quickly destroy expired pipes; the minister advised using better technologies, which are the best practices elsewhere in other countries. He encouraged the government to change the models to the new ones, which are mainly expensive.
He declared that the NNPC does not have the capacity to re-establish pipelines with advanced ones used in another country because it lacks the resources to do so.
Speaking further, the minister encouraged public-private partnerships to fix the old pipelines that utilised the goberly model. He explains that investors have lost trust in the country’s oil industry because of the activities that have happened in the past 12 years, so there is no significant investment in the sector currently. He encouraged stakeholders to build trust with investors, which is the only way there could be public-private partnerships.
He disclosed that since the inception of the new government, steps have been taken to encourage public-private partnerships across the country.
Speaking of fuel smuggling to other countries, Lokpobiri noted that the practice had been seen because the NNPC has been importing and selling fuel below the landing cost. He indicted the security agents at the borders, noting that they were all involved in the smuggling process.
He noted that security agencies need to play a critical role in stopping smugglers’ activities in the country.
The minister expressed fears that the supply of crude to the Dangote refinery and other local refineries may suffer setbacks due to increased production in the country. He explained that the Federal Executive Council has ordered the sale of crude to local refiners for local consumption.
He explained that the best practice is to support local refineries. He noted that the government will look for investors who will bring out the crude. According to him, increasing crude extraction will help the country explore and gain an exchange rate while achieving local sufficiency.
He expressed government readiness to support local refineries with crude but with healthy competition around the oil business for small and big refineries.
