NNPC Struggles With Old Pipelines, FG Calls For Public-Private Partnerships

NNPC Struggles With Old Pipelines, FG Calls For Public-Private Partnerships

The Minister of State for Petroleum Resources, Heineken Lokpobiri, has declared that the Nigerian National Petroleum Company (NNPC) Limited does not have the financial resources required to rehabilitate its aging pipelines. Speaking at the Energy and Labour Summit 2024 in Abuja, Lokpobiri highlighted the critical condition of the country’s pipelines, which he described as outdated and corroded.

Lokpobiri pointed out that while Nigeria has the capacity to produce over 1.7 million barrels of crude oil daily, the major issue lies in transporting this oil efficiently due to the deteriorating state of the pipelines. He noted that pipelines built in the 1960s and 1970s are now beyond their useful life, making them susceptible to vandalism.

The Minister suggested that public-private partnerships (PPPs) are necessary to address the issue, given that NNPC may lack the funds for pipeline replacement. He emphasized the need for a new model to improve pipeline infrastructure and attract private sector investment.

Lokpobiri also addressed issues related to fuel smuggling and its connection to NNPC’s pricing strategy. He noted that selling fuel below the landing cost contributes to smuggling and mentioned that even enhanced border security might not fully stop the practice due to involvement from local agents.

Furthermore, Lokpobiri discussed challenges in supplying crude oil to local refineries like Dangote, stressing the need for increased production to meet domestic and export demands. He reiterated the government’s commitment to promoting local refining and ensuring fair competition among refiners.

The Minister’s statements underscore the ongoing challenges in Nigeria’s oil sector and the urgent need for effective solutions to address infrastructure and investment issues.