FG: NNPC Lacks Funds to Repair Aging Pipelines

The Federal Government announces that the Nigerian National Petroleum Corporation (NNPC) does not have the necessary funds to repair the country’s aging pipelines, raising concerns over the future of energy infrastructure

According to the declaration by the Federal Government, there is a lack of necessary funds for Nigerian National Petroleum Company Limited to reconstruct aged pipelines.

During the Energy and Labour Summit 2024 organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja, Heineken Lokpobiri – who serves as Minister of State for Petroleum Resources (Oil) – made this declaration.

Lokpobiri highlighted the importance of repairing Nigeria’s old, corroded and expired pipelines in addition to divesting international oil companies and increasing production.

He observed that while the country’s crude oil production surpasses 1.7 million barrels, the challenge lies in effectively transporting it to the terminal.

One of the challenges we face is that our crude oil pipelines were constructed during the 1960s and 1970s, with their intended lifespan already surpassed. Even though we can extract petroleum successfully, getting it transported remains a significant obstacle.

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Pipeline vandalism is easily done due to the fact that those pipelines have expired and corroded entirely. As a result, anyone can tap into them with ease resulting in damage. Despite this, other countries are using better technology such as superior pipelines; however they come at an expense which we need to take note of if implementing change for our own model.

Lokpobiri stated that the NNPC, our joint venture partner, may not possess sufficient funds to replace these pipelines. He believes they will need to confirm this themselves and in his opinion, he does not think they do have enough money for the task.

As a result, he advocated for collaboration between public and private entities in order to address the dilapidated pipelines. He stated that “the solution lies in adopting PPP as a global model” which entails engaging the private sector for assistance.

He emphasized that in the last 12 years, when there was no foreign investment in the nation’s oil company, it lacked confidence among private sector investors. Therefore, for any country to attract investments from them, building trust is imperative.

Lokpobiri added that since the arrival of this government, efforts have been made to restore confidence and attract investors. As a result, they are now starting to come.