The Nigerian government has announced that the Nigerian National Petroleum Company Limited (NNPC) does not have enough funds to repair its aging pipelines.
Heineken Lokpobiri, the Minister of State for Petroleum Resources, made this statement during the recent Energy and Labour Summit 2024 in Abuja. The summit was organized by the Petroleum and Natural Gas Senior Staff Association of Nigeria.
Lokpobiri discussed the issues of pipeline repairs, the withdrawal of international oil companies, and the need to increase oil production. He highlighted that even if Nigeria manages to produce over 1.7 million barrels of crude oil per day, transporting it to export terminals is still a major challenge due to the condition of the pipelines.
“The pipelines we use today were built in the 1960s and 1970s, and they are now beyond their useful lifespan. They are corroded and in poor condition,” Lokpobiri explained. “This makes transporting crude oil difficult and opens the door to vandalism. The old pipelines are easy targets because they are so damaged. While newer, more expensive technology exists, it’s not currently in use here. We need to update our approach.”
Lokpobiri questioned whether the NNPC has the financial resources to replace these outdated pipelines. He implied that the NNPC might not have sufficient funds and suggested that the government should consider involving private companies through public-private partnerships (PPP) to tackle the problem.
Lokpobiri also addressed the issue of fuel smuggling. He noted that because NNPC sells fuel at prices lower than the cost of importing it, smugglers often transport fuel to neighboring countries. He pointed out that even though security agents are stationed at the borders, they sometimes allow smuggling to occur. He suggested that corruption among these agents is a significant problem.
“Nigeria plays a key role in energy security across Africa,” Lokpobiri said. “The fuel we import often ends up in other West African countries. If NNPC sells fuel at prices below cost, smuggling will continue, and this issue is compounded by the involvement of Nigerian border security personnel.”
He concluded by stressing that for Africa to achieve energy security, Nigeria must effectively address these challenges and improve its energy infrastructure.
