Government Declares NNPC Lacks Funds to Rebuild Aging Pipelines....KINDLY READ THE FULL STORY HERE▶

The Federal Government of Nigeria has officially stated that the Nigerian National Petroleum Company Limited (NNPC) does not possess the necessary funds to reconstruct its outdated pipelines. This declaration was made by the Minister of State for Petroleum Resources, Heineken Lokpobiri, during the recent Energy and Labour Summit 2024 in Abuja, organized by the Petroleum and Natural Gas Senior Staff Association of Nigeria.

While addressing the urgent need to address the divestment of international oil companies and enhance production levels, Lokpobiri highlighted the critical condition of Nigeria’s pipelines. He emphasized that many of these pipelines, built in the 1960s and 1970s, are now old, corroded, and beyond their lifespan.

“Even if we can produce more than 1.7 million barrels of crude oil, the challenge lies in transporting it to the terminals,” Lokpobiri noted. He pointed out that the deteriorating state of these pipelines makes them vulnerable to vandalism, as they are easy targets for theft and damage due to their age and condition. “The pipelines are completely corroded, making it simple for anyone to tap into them,” he explained.

According to Lokpobiri, although more advanced and expensive pipeline technologies exist, the NNPC currently lacks the financial resources to implement these upgrades. “I don’t think NNPC has the money to replace these pipelines,” he stated. To address this issue, he called for public-private partnerships (PPP) to attract private sector investments, which he believes are essential for revitalizing Nigeria’s oil infrastructure.

Building Investor Confidence

Lokpobiri emphasized the importance of restoring investor confidence in Nigeria, which he claims has been lacking for the past 12 years. “When this government came into power, we worked to rebuild that confidence, and investors are beginning to return,” he said.

He further discussed the issue of fuel smuggling, attributing it to the fact that NNPC imports fuel and sells it below the market cost. “Nigeria plays a critical role in the energy security of Africa, which is why our imported products often find their way into neighboring countries,” he stated, noting that the pricing structure is a significant factor in fueling smuggling operations.

Lokpobiri also addressed the challenges of supplying crude oil to local refineries, including Dangote. He expressed concerns that unless production increases, local refineries may face shortages. “Our goal is to ramp up production, as this is crucial for the success of midstream and downstream operations,” he explained.

Support for Local Refineries

The minister reaffirmed the government’s commitment to supporting local refining efforts by ensuring an adequate supply of crude. “Supporting local refining is essential. We will seek investors to explore and extract this crude to meet our domestic needs while also generating revenue through exports,” Lokpobiri said.

He pledged that the Federal Government would foster a competitive environment for both large and small refiners, ensuring fairness in the market. “Healthy competition is vital for the industry’s growth, and we will provide the necessary support for all refiners operating in Nigeria,” he concluded.